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UK economy grows slightly in February

The 0.1% rise boosts hopes that the economy is escaping recession.

Pedro Goncalves
·Finance Reporter, Yahoo Finance UK
Updated ·3-min read
Robotic arms rivet car panels together in the Aluminium Body Shop, part of Jaguar Land Rover's Advanced Manufacturing Facility in Solihull, Birmingham. Picture date: Wednesday March 15th, 2017. Photo credit should read: Matt Crossick/ EMPICS. Aluminium Body Shop 3 is Europe's largest aluminium body shop, and contains nearly 800 robots building Jaguar F-Pace and Range Rover Velar cars. It is capable of producing an aluminium car body every 76 seconds.
The UK economy grew for the second month in a row with manufacturing recording the fastest increase. (Matt Crossick)

The UK economy has grown slightly for the second month in a row, boosting hopes that the economy is escaping recession.

Gross domestic product (GDP) grew 0.1% in February, the Office for National Statistics (ONS) said.

The UK entered a technical recession at the end of 2023 after data showed two quarters of economic contraction.

Production, which includes manufacturing, recorded the fastest increase, growing 1.1% in February. The services sector grew 0.1%.

Construction was the real laggard in the UK economy in February, with output contracting by 1.9%.

Read more: What is a technical recession and what does it mean for me?

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The statistical body also lifted its forecast for January, to show 0.3% growth, up from 0.2% previously estimated.

ONS director of economic statistics Liz McKeown noted that the UK economy grew for the first time since summer.

“The economy grew slightly in February with widespread growth across manufacturing, particularly in the car sector. Services also grew a little with public transport and haulage, and telecommunications having strong months," she said.

“Partially offsetting this there were notable falls across construction as the wet weather hampered many building projects.

“Looking across the last three months as a whole, the economy grew for the first time since last summer," she added.

If the economy expands for three months, the UK will be officially out of recession.

Read more: ECB holds interest rates but hints at future cuts

Chancellor Jeremy Hunt said: "These figures are a welcome sign that the economy is turning a corner, and we can build on this progress if we stick to our plan.

“Last week our cuts to national insurance for 29 million working people came into effect across Britain, as part of our plan to reward work and grow the economy.”

Neil Birrell, chief investment officer at Premier Miton Investors, said the Bank of England might start cutting sooner rather than later.

"The UK economy grew, albeit very modestly, in February, suggesting that any sort of meaningful recession will be avoided," he commented.

"With inflation tracking back, the Bank of England might be persuaded to start cutting rates sooner rather than later and after the CPI [consumer price index] data out of the US and the ECB [European Central Bank] meeting over the last week, we could well see the Fed being the last of the three to take any action on rates.That would quite a shift over a period of a few months."

“The sun is finally out but the UK economy outlook remains foggy” said in a more cautious tone Yael Selfin, chief economist at KPMG UK.

Watch: What is a recession and how do we spot one

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