UK growth beats forecasts, but global turmoil threatens to slam the brakes

Britain’s economy delivered an unexpectedly strong burst of growth in February, offering a rare moment of optimism before mounting global pressures threaten to slow momentum.

Figures from the Office for National Statistics show that GDP rose by 0.5% month-on-month, the fastest pace since January 2024 and well ahead of economists’ forecasts of just 0.1%.

The data also included an upward revision for January, now estimated to have grown by 0.1% rather than stagnating.

The stronger-than-expected performance suggests the UK entered 2026 on firmer footing than previously thought, with growth driven by resilience across key sectors of the economy.

Yet the upbeat figures risk being short-lived. Economists warn that escalating geopolitical tensions—particularly the fallout from the war in Iran—are likely to weigh heavily on the outlook through higher energy prices and renewed uncertainty in global markets.

The International Monetary Fund has already sounded the alarm, warning that the UK faces the steepest downgrade among G7 economies. In its latest outlook, the IMF cut its 2026 growth forecast to 0.8%, down sharply from the 1.3% projected as recently as January.

Rising energy costs, coupled with weaker global demand, are expected to squeeze both households and businesses in the months ahead, raising questions over whether February’s surge represents a genuine turning point or merely a temporary reprieve.

James Murray, Chief Secretary to the Treasury, said: “Growth only happens when the economy is on solid ground.”

He added: “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.”

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.