UK Economy Grows 0.5% in February Before US-Israeli War With Iran

The UK economy expanded by a surprising 0.5% in February 2026, beating economists' expectations of just 0.1%.

The ONS revised January growth up to 0.1% from flat.

BBC

The figures cover a period before the outbreak of the US-Israeli war with Iran on 28 February.

The IMF cut its estimate for UK growth this year to 0.8%, down from 1.3% in January.

The ONS said the key services sector grew by 0.5%, production output grew by 0.5%, and construction rose by 1.0%.

In the three months to February, GDP grew by 0.5% - up from 0.3% in the three months to January.

Economists warned the recovery would be short-lived due to the impact of the Iran war.

The IMF warned the UK could face the biggest hit to growth from the Middle East war among the G7.

BBC

The Bank of England kept interest rates unchanged at 3.75% in March.

The prospect of rising energy prices has led markets to price in at least one quarter-point rise in rates this year.

Services output grew by 0.5% in the three months to February.

Wholesale and retail trade grew 1.4%, driven by a 3.1% rise in wholesale trade.

Information and communication grew 1.6%, driven by increases in publishing.

Production output grew by 1.2%, while construction output fell by 2.0%.

Jaguar Land Rover's recovery from a cyber-attack contributed to the improving picture.

James Murray said growth only happens when the economy is on solid ground.

Shadow chancellor Mel Stride said the economy is totally unprepared for the recent energy shock.

GB News

The Liberal Democrats' Daisy Cooper said the positive figures were already in the rear view mirror.

Hundreds of mortgage deals have been pulled, with rates rising.