UK GDP February 2025

The UK economy grew to a 0.5% month higher than expected in February amid a surge in service output, official data showed on Friday.

Analysts predicted a monthly increase in gross domestic product by 0.1% in February, according to LSEG data.

Released the interim figures, the National Statistics Bureau said a 0.3% expansion in the services sector has driven a surprising jump in growth. In January, the service recorded a monthly increase of 0.1%.

Production recovered significantly in February, with monthly growth rates increasing by 1.5% compared to the monthly contraction of 0.5% seen in January. Construction output also recovered in February, falling 0.3% in January, then added 0.4% per month.

British Pound After the release of the data, it opposed the dollar, rising 0.6% against the greenback, trading at $1.3047 by 8:08am in London.

Early estimates in January showed that the UK economy had shrunk by 0.1% each month. That figure was later revised upward to show that economic growth had remained flat in January.

The UK economy has struggled to gain momentum over the past year. ONS data showed earlier this year that UK GDP expanded by 0.1% in the fourth quarter of last year, after flatlined three months ago.

Friday’s figures will be released as UK orthotics equipment for the economic impact of the new 10% tariff on exports to the US.

British lawmakers wanted to avoid the full power of President Donald Trump’s customs administration. The United States accounts for 17% of UK international trade until September 2024, making it the UK’s largest trading partner.

Trump’s suspended mutual tariffs will slap the UK with a 10% obligation on British goods if it recovers when the suspension ends this summer.

Suren Till, director of economics at the chartered accountants’ institutes in England and Wales, said the uncertainty created by the tariffs is likely to override economic data that exceeded Friday’s forecast regarding the Bank of England’s decision to whether to cut interest rates next month.

According to LSEG data, the market is currently priced at 25 interest rate cuts from the UK Bank in May, reducing the central bank’s core interest rate to 4.25%.

“Activity has recovered strongly as service and manufacturing output recovered, but the February figures were firmly pushed into the background by the financial market vedolam, triggered by Trump’s tariff announcement,” Till said.

“The global financial and economic instability caused by the announcement of US tariffs will allow for May reductions by further promoting rate setter concerns about the fundamental resilience of the UK economy.”

Meanwhile, reducing major welfare spending and greater tax burdens on businesses have created concerns about the economic outlook.

Last month, the UK’s Budget Responsibility Office halved its UK growth forecast, reducing its 2025 outlook from 2% to 1% growth.