UK GDP showed surprise growth of 0.5% in February - an increase that has been welcomed by industry experts as a sign of a stronger economy than expected.

Real gross domestic product (GDP) was estimated by ONS to have grown by 0.5% in February although this estimate may be later revised.

There was growth in “all main sectors” after January showed no growth (revised up from a fall of -0.1%). Some commentators had expected growth of only 0.1% in February.

Real GDP is estimated to have grown by 0.6% in the three months to February 2025, compared with the three months to November 2024, mainly because of growth in the services sector. 

The figures suggest recent growth in the economy is better than expected.

Monthly services output grew by 0.3% in February after unrevised growth of 0.1% in January, and grew by 0.6% in the three months to February 2025.

Production output grew by 1.5% in February 2025, following a fall of 0.5% in January with the car sector and other manufacturing output driving growth. Construction output grew by 0.4% in February 2025, following a fall of 0.3% in January.

Luke Bartholomew, deputy chief economist, at Aberdeen, said; “The economy grew much faster than expected in February. Some of this probably represents standard monthly volatility, but the strength is reasonably broad, and the data should provide some reassurance that growth was holding up before tariffs, national insurance, national living wage and the Spring Statement impacted.

"However, tariff developments and the swings in market sentiment will likely dominate any backward looking data in terms of shaping the outlook for the economy and policy. We continue to expect another rate cut from the Bank of England in May despite the somewhat growth given the likely disinflationary shock from global trade developments."

Scott Gardner, investment strategist at JP Morgan-owned digital wealth manager, Nutmeg, said: “The shock and awe of the past few days will overshadow these latest UK GDP figures but a sizeable return to growth during February for the UK economy marks a positive end to the week. 

“Driving this expansion in the economy, we saw a back-to-back monthly jump in retail sales volumes as consumer confidence levels also marginally increased during February. On the other side of the coin, manufacturing PMIs remained at a low level with output and new orders remaining in contraction territory.

“Looking ahead, while the UK economy is forecasted to grow in 2025, it is hard to view these figures in isolation after this week’s events. The recent tariff announcements provide some uncertainty for the economy and will impact the trading environment for businesses throughout the rest of the year. That said, as the UK is a leading global exporter of services, the economy appears to be in a relatively better position than Europe which is more exposed to the dynamics of global goods trading. In our view, a rebound in housing market activity, buoyed by falling interest rates, remains pivotal to delivering a sustained uptick in growth.”

Derren Nathan, head of equity research at Hargreaves Lansdown, said: “Construction, services and production were all in positive territory with production leading the way at 1.5% led by the manufacturing sector. Technology and pharmaceuticals had the strongest showings showcasing the UK’s strength in specialist areas and highlighting the pressure on the government to ensure that the UK remains a competitive home for workers and companies in knowledge intensive industries."

Chancellor of the Exchequer, Rachel Reeves, said: “These growth figures are an encouraging sign, but we are not complacent. We must keep going further and faster on our Plan for Change.

“The world has changed, and we have witnessed that change in recent weeks. I know this is an anxious time for families who are worried about the cost of living and British businesses who are worried about what this change means for them. This Government will remain pragmatic and cool-headed as we seek to secure the best deal with the United States that is in our national interest. At the same time we will be relentless in our work to kickstart economic growth, provide security for working people and renewal for Britain."