Britain’s economy surged unexpectedly in February, suggesting it was in slightly better shape before the start of the Iran war than many economists had feared, official figures showed on Thursday.
The Office for National Statistics said gross domestic product rose by 0.5 per cent month-on-month in February, the biggest increase since January 2024.
Economists polled by Reuters had forecast 0.2 per cent growth in gross domestic product for February.
“Growth increased further in the three months to February led by broad-based increases across services,” ONS chief economist Grant Fitzner said.
“Meanwhile car production recovered from the effects of the autumn cyber incident.”
While the data are likely to please finance minister Rachel Reeves, economists said Britain’s economy remained vulnerable to the fallout from the Middle East conflict, being highly dependent on imported natural gas and prone to higher inflation than peers.
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“Unfortunately, the latest energy price shock has likely pulled the rug on this momentum, with another year of above-target inflation and a softening labour market likely to come,” said Fergus Jiminez-England, associate economist from the National Institute for Economic and Social Research.
Economic growth for the three months to February was 0.5 per cent, the ONS said, putting Britain’s economy on track for a conspicuously strong first quarter, for a third year running.
That pattern has led to suspicions among some economists that the ONS’ process of seasonal adjustment has gone awry following unusually large swings in output during the COVID-19 pandemic – something the ONS rejects.
“We’re confident in our figures and seasonal adjustment processes,” an ONS spokesperson said on Thursday. – Reuters