UK Economy Grows Faster Than Expected in February Amid US Tariff Concerns

The UK economy grew by 0.5% in February, significantly outpacing economists’ forecasts of just 0.1%, according to the Office for National Statistics (ONS). The unexpected rise was driven by a strong performance in the services sector, particularly in computer programming, telecommunications, and car sales.

Manufacturing also saw notable gains, especially in electronics and pharmaceuticals. The car industry, which had been underperforming, showed signs of recovery. The ONS also revised January’s economic data from a 0.1% contraction to flat growth.

Exports to the US surged by £500 million during the same period, with many UK firms accelerating shipments to beat the onset of new US tariffs. Goods exports from the UK to the US have now risen for three consecutive months, reaching their highest level since November 2022.

William Bain of the British Chambers of Commerce said the data clearly shows UK businesses acted quickly to get ahead of impending tariffs. “There’s been a 23% increase in exports to the US over the last three months,” he said.

However, analysts caution that the momentum may be short-lived. With new tariffs on British goods—10% on most exports, and additional levies on items like steel and aluminium—growth could face future headwinds. Rising household utility bills and business tax increases are also expected to take a toll.

Chancellor Rachel Reeves called the February growth figures an “encouraging sign” but emphasized that more needs to be done. “We must go further and faster to provide economic security and boost living standards,” she said.

The government continues to push for a deal with the US to reduce the impact of the tariffs. Reeves confirmed ongoing discussions with American counterparts aimed at safeguarding British industry and jobs.

Despite the recent upturn, economists like Ruth Gregory from Capital Economics believe the growth spurt may not last. “Strong growth will prove short-lived as tariffs and taxes begin to bite,” she said.

Meanwhile, domestic business owners such as Mitchell Barnes, who runs a 3D printing firm in Warwickshire, are already feeling the squeeze. While half of his exports go to the US, he cites rising labour costs at home as a more immediate concern. Plans to grow his staff from 27 to 100 have been scaled back to a target of just 30-40.

Instead, Barnes says he may focus more on expanding operations in the US. “Ultimately, for us, it’s all about innovating in order to control our own destiny,” he said.