The UK economy grew by 0.5% in February 2025, far exceeding economists’ expectations and signaling renewed momentum following a sluggish start to the year. Official data released Monday shows a sharp rebound from January’s flat output and points to potential growth of up to 0.6% for the first quarter.
The Office for National Statistics (ONS) reported strong performance across services, manufacturing, and construction, with consumer activity and export volumes also showing modest gains.
“This is an encouraging sign that the economy may be turning a corner,” said Neil Harris, chief economist at the Centre for Economic Renewal. “While global headwinds persist, domestic resilience is holding up better than anticipated.”
The 0.5% growth figure beat the 0.1% forecast widely held by analysts, prompting hopes that the UK can avoid recession in 2025. Several sectors particularly technology, finance, and hospitality led the rebound, bolstered by easing inflation and improved consumer confidence.
The data comes just days after the Bank of England cut interest rates to 4.25%, part of an effort to stimulate demand amid a loosening labor market and slowing inflation. Policymakers may now face pressure to proceed more cautiously with further rate cuts if growth remains solid.
Markets responded positively, with the FTSE 100 inching higher and sterling strengthening modestly against the dollar. Business groups called the numbers a “welcome boost” but warned that challenges including geopolitical tensions, supply chain volatility, and energy costs could still weigh on the recovery.
“The path forward remains uneven,” said Sarah Patel of the British Chambers of Commerce. “But this data shows the UK economy still has underlying strength.”
February’s growth sets the stage for a cautiously optimistic second quarter, with forecasters now revising their GDP expectations upward.
