Official figures show the UK economy grew far more than expected in the month before the war in Iran began, as ITV News Business and Economics Editor Joel Hills reports
The UK economy grew at its fastest pace in more than a year in February, marking a better-than-expected start to 2026, official figures have shown.
The Office for National Statistics (ONS) said gross domestic product (GDP) grew by 0.5% month-on-month in February following upwardly revised growth of 0.1% in January.
Most economists had forecast GDP to rise by just 0.1% in February, while the ONS had previously estimated no growth in January.
But the figures come amid forecasts that Britain’s output will be hardest hit this year by the fallout from the Iran war and soaring energy costs.
A stark economic outlook report from the International Monetary Fund (IMF) earlier this week showed the UK facing the biggest downgrade to growth among the G7 group of countries, with 0.8% forecast for 2026, down sharply from the 1.3% predicted in January.
Chief Secretary to the Treasury James Murray said: “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.”
The ONS said in the three months to February, GDP rose by 0.5% following growth of 0.3% in the three months to January, revised up from the previous estimation of 0.2%.
However, the ONS revised its figure for the three months to December 2025 down to zero growth.
Grant Fitzner, chief economist at the ONS, said growth in February was “led by broad-based increases across services”.
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Services output grew by 0.5% month-on-month in February, while manufacturing activity contracted by 0.1% and construction saw a 1% rebound.
The services growth was driven by wholesaling, market research, hospitality and publishing, which all performed well in the three months to February.
Mr Fitzner also said car production recovered from the effects of last year’s cyber incident, which knocked a large amount of Jaguar Land Rover’s infrastructure offline.
Shadow chancellor Sir Mel Stride said: “Any economic growth is welcome, but the IMF were clear this week that under Labour our economy is totally unprepared for the recent energy shock.”
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