Rachel Reeves’s work in attempting to revive the UK’s sluggish economy has been underlined by new data showing it grew 0.5% in February, a significant rebound after failing to grow at all the previous month. The Office for National Statistics (ONS) confirmed that services, the largest sector of the economy, grew by 0.5% and acted as the primary driver of expansion.
Output also rose 0.5% during the month, boosted by a recovery in car manufacturing following the autumn cyber incident. However, the construction sector continued to struggle. Despite growth of 1.0% during the month, construction output declined by 2.0% on a three-month basis. Previous data was also revised slightly higher, with January’s monthly growth adjusted down to minus 0.1%, while GDP was found to be 1.0% higher than in February 2025.
ONS chief economist Grant Fitzner commented: “Growth accelerated further in the three months to February due to broad-based growth in all services.
“Within services, growth was driven by wholesaling, market research, hospitality and publishing, which performed well in the three months to February. Car production meanwhile recovered from the impact of the autumn cyber incident.
“Growth in services and manufacturing was partially offset by another decline in manufacturing, although at a slower rate than before; leasing and intellectual property licensing also continued to contract.”
The data follows a period of stagnation into early 2026, where the economy stagnated in January, missing expectations for 0.2% growth. These lackluster figures preceded the recent flare-up of conflict in the Middle East, which has since sent oil prices above US$100 for the first time in nearly four years.
Speaking in Washington on Wednesday, the Chancellor expressed his concern over donald trumpDescribing the war on Iran as a mistake that directly threatens British economic stability. He warned that as a net importer of gas, the UK is heavily affected by the resulting energy spikes.
Ms Reeves joined 10 other countries in calling for de-escalation, saying national growth would be higher and inflation lower if the conflict ended. It follows a period of meager growth of just 0.1% in the last three months of last year, a trend the Treasury is desperate to reverse.
