The UK’s economy grew by 0.5% in February, according to data from the Office for National Statistics (ONS).
The figure comfortably beat the consensus forecast of just a 0.1% rise, indicating the economy was in better health than thought by most economists.
The reading was based on data from before the outbreak of war in the Middle East that sent energy prices surging and shook confidence across the economy.
This means the healthy growth seen is likely to be short-lived, with March data much less positive.
Earlier this week, the UK saw the biggest cut to its annual growth forecast from the IMF among advanced economies, with the figure now expected to be down from 1.3% last year to just 0.8%.
Another concern is that the reading being so far off forecasts may suggest the figures are being distorted by seasonality, or other issues in how the data is collated.
Andrew Wishart, senior UK economist at Berenberg, said: “The large upside surprise to GDP growth in February will reignite concerns about residual seasonality in the GDP statistics, but nonetheless confirms that the economy made a good start to the year.
“Although the survey evidence indicated an acceleration in output, no analyst anticipated the 0.5% month-on-month surge.
“On an annual basis, growth picked up from 0.7% to 1.0% as a strong February made up for a disappointing end to 2025.
“Sadly, the start of the Iran war on 28 February will stop the upswing in its tracks. The release is old news now, but because it showed growth accelerating with bank rate at 3.75% it will, at the margin, make the Bank of England more hawkish.”
Wishart added that urgent action remains unnecessary in his view, as the switch in market rate expectations from two cuts in February to one or two hikes today has already ‘put the brakes on demand’.
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Danni Hewson, head of financial analysis at AJ Bell, said: “It feels almost cruel that the UK economy had managed to find a higher gear in February and grew faster than had been thought in the opening days of 2026.
“After a disappointing end to 2025, which was one of the factors in the IMF’s calculations suggesting the UK economy will take the biggest hit of G7 countries because of the Iran war, the start of this year had looked surprisingly buoyant.
“The hugely important service sector was responsible for much of the momentum, with the jobs market showing tentative signs of recovery as businesses brushed off the impact of increased labour costs.
“Big ticket purchases were back on the table with car sales notably higher, people were already booking their summer holidays, and accountants and bookkeepers saw a spike in workload as businesses prepared for the huge change of Making Tax Digital which went live at the start of April.”
Hewson added the bounce back from last year’s cyber-attack on Jaguar Land Rover was continuing to power the production sector as the supply chain raced to take advantage of pent-up demand.
“But it wasn’t all good news, with construction still stuck in the doldrums as housebuilders continued to display an abundance of caution,” she continued.
“This will have only been exacerbated by the situation in the Middle East, which has altered the expected path of interest rates.”
Barret Kupelian, chief economist at PwC, added: “Had the UK economy begun to turn a corner after the Autumn Statement and before the latest developments in the Middle East? Today’s data suggests it had.
“It looked to be finding its feet, but geopolitics may yet kick the chair away. Output grew by 0.5% in the three months to February, with both production and services expanding together.
“More importantly, this was growth powered by the private sector rather than the public sector-dominated parts of the economy that had propped up much of the post-2023 picture. That suggested the recovery was becoming broader and more durable.
“The question now is whether that recovery can withstand a fresh external shock.”
