UK economy surges ahead of Iran war, but energy shock to test resilience
GDP is up 0.5% month on month in February, beating economists’ estimates of 0.2% growth
Add BT as a preferred source
DeeperDive is a beta AI feature. Refer to full articles for the facts.
[LONDON] Britain’s economy surged unexpectedly in February, suggesting that it was in slightly better shape before the start of the Iran war than many economists had feared, official figures showed on Thursday (Apr 16).
The Office for National Statistics (ONS) said that 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 a 0.2 per cent growth in GDP.
“Growth increased further in the three months to February, led by broad-based increases across services,” said ONS chief economist Grant Fitzner.
“Meanwhile, car production recovered from the effects of the autumn cyber incident.”
While the data is likely to please Finance Minister Rachel Reeves, economists said that Britain’s economy remained vulnerable to the fallout from the Middle East conflict, given its high dependence on imported natural gas and prone to higher inflation than its peers.
Navigate Asia in
a new global order
Get the insights delivered to your inbox.
Fergus Jiminez-England, associate economist from the National Institute for Economic and Social Research, said: “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.”
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 the third year running.
That pattern has led to suspicions among some economists that the ONS’ process of seasonal adjustment has gone awry, after there were unusually large swings in output during the Covid-19 pandemic – something that the ONS rejects.
“We’re confident in our figures and seasonal adjustment processes,” an ONS spokesperson said on Thursday. REUTERS
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
