GDP grows by surprising amount but it could be last uptick for a while

The UK economy grew far more than expected in the month before the war in Iran began, latest official figures show.

The three months to February saw 0.5% growth in gross domestic product (GDP), the standard measure of the value of an economy and everything it produces, according to data from the Office for National Statistics.

In just the month of February, the rise was also 0.5%.

Revised figures, also published on Thursday, said there was no growth in the three months to December.

February's growth was down to expansion in the largest part of the economy: services.

In particular, wholesaling, market research, hospitality, and publishing all performed well in the three months to February, said the ONS's chief economist, Grant Fitzner.

The government welcomed the latest figures, with chief secretary to the Treasury James Murray saying: "Growth only happens when the economy is on solid ground. That's why in a changing world our plan to restore stability, boost investment and deliver reform is the right one to build a more stronger more resilient Britain.

"At the IMF meetings in Washington the chancellor has set out how we will go further and faster to boost Britain's competitiveness and build a stronger, more resilient economy, keeping costs down for families and businesses and taking back control of our energy costs as today we cut bills by up to 25% for 10,000 British businesses."

UK car production also recovered from the August cyberattack at Jaguar Land Rover, which for more than a month forced a halt to production across its global operations. Overall, production in the UK grew 1.2%.

Growth would have been higher but construction output fell, just more slowly than previously.

Leasing and intellectual property licensing are also continuing to contract, Mr Fitzner added.

Economic expansion of just 0.1% had been forecast for February by economists polled by the Reuters news agency.

The government has repeatedly said its number one priority is economic growth but the rises in GDP have been slight.

Last growth for some time?

Yet it may be the last period of growth for some time.

Despite the current two-week ceasefire, the Iran war is forecast to hit the UK economy more than others.

Britain's economic prospects have been downgraded more than any other major economy in the International Monetary Fund's latest update on the state of the world.

A similar downgrade was made by the Organisation for Economic Co-operation and Development (OECD).

(c) Sky News 2026: GDP grows by surprising amount but it could be last uptick for a while