UK GDP expanded by a stronger than expected 0.5% in February, official figures show, suggesting the economy was gaining momentum before the onset of war in the Middle East dashed hopes of recovery.<\/p>\n
The jump, reported by the Office for National Statistics (ONS), was significantly bigger than the 0.1% forecast by economists. January\u2019s flatlining figure was also revised up, to 0.1% growth.<\/p>\n
The ONS said February\u2019s upturn was driven by a strong performance from the services sector and from manufacturing, both of which posted 0.5% growth, and a recovery in construction output, which was up 1%.<\/p>\n
Over the three months to February \u2013 a measure that tends to be less volatile than the monthly data \u2013 GDP expanded by 0.5%, up from 0.3% in the three months to January, echoing the picture of strengthening growth.<\/p>\n
Grant Fitzner, the ONS chief economist, said: \u201cGrowth increased further in the three months to February, led by broad-based increases across services. Within services, growth was driven by wholesaling, market research, hospitality and publishing, which all performed well in the three months to February.\u201d<\/p>\n
He added that Jaguar Land Rover\u2019s recovery from last autumn\u2019s damaging cyber-attack<\/a> that halted production for weeks had also contributed to the improving three-monthly picture.<\/p>\n While there may have been evidence of a nascent recovery in February, economists have significantly downgraded forecasts for UK growth in 2026, with oil and gas prices soaring as a result of the effective closure of the strait of Hormuz.<\/p>\n Surveys have shown business<\/a> and consumer confidence <\/a>declining sharply, and investors believe interest rates may have to rise to restrain the inflationary impact of the war.<\/p>\n Martin Beck, the chief economist at the consultancy WPI Strategy, said: \u201cThe real danger is that February turns out to be the calm before the storm, with the consequences of conflict in the Middle East dragging overall Q1 growth down. Last month saw a sharp rise in energy prices alongside a surge in geopolitical uncertainty.\u201d<\/p>\n Suren Thiru, chief economist at the accountancy body the ICAEW, said: \u201cFebruary\u2019s growth will have been followed by a more miserable March with skyrocketing fuel prices and supply chain chaos sparked by the Iran war likely to have stalled economic activity, despite an early Easter boost to sectors like retail.\u201d<\/p>\n