-- The UK recorded a higher-than-expected gross domestic product growth in February, supported by higher month-over-month output in the services, production, and construction industries.
The country's monthly real GDP rose 0.5% in February, following an upwardly revised 0.1% growth in January, according to data from the Office for National Statistics published Thursday. The latest figure came in above the consensus estimate of a 0.1% uptick.
Annually, the British economy expanded by 1%, against the revised 0.7% gain and the expected 0.6% rise. In the quarter to February 2026, UK GDP edged up 0.5%, compared with the three months ended November 2025, mainly driven by broad-based growth in the services sector.
"Within services, growth was driven by wholesaling, market research, hospitality, and publishing, which all performed well in the three months to February. Meanwhile car production recovered from the effects of the autumn cyber incident," ONS Chief Economist Grant Fitzner said. "Growth in services and production was partially offset by another fall in construction, albeit at a slower rate than previously, with leasing and intellectual property licensing also continuing to contract."
ONS data showed that monthly output in the services and production sectors both grew 0.5% in February, after a revised 0.1% gain and a 0.1% decline in January, respectively. Meanwhile, the construction industry saw a 1% increase in output, following a revised increase of 0.5% previously.
"UK output surged in February, but it's in line with a trend dating back to 2022, where growth is stronger in the first quarter than across the rest of the year. We're taking this latest data with a pinch of salt," ING said, noting that the apparent increase looks "too good to be true" and the outlook for the British economy points to a slowdown amid the ongoing war in the Middle East. "Growth is likely to slow regardless into the summer as inflation rises towards 4% beyond July."
The research firm added that it remains unconvinced that the Bank of England will increase its key rate in 2026 amid higher energy prices and expectations of a decline in real wages.
"It's a close call, which becomes closer still if the disruption hasn't materially improved by the time of the June meeting. But for now, we're looking for rates to stay unchanged at 3.75% throughout 2026," ING said.
The BoE is scheduled to hold its next monetary policy meeting on April 30.