UK gross domestic product (GDP) expanded by 0.5% month-on-month in February, which is the biggest monthly increase in over two years, the Office for National Statistics (ONS) has revealed.

The latest data follows month-on-month growth of 0.1% in December 2025 and January respectively.

In February, services and production output both increased by 0.5%, while construction output grew by 1%.

In the three months to February, the ONS found that GDP grew by 0.5% compared to the three months to November 2025. This follows growth of 0.3% in the three months to January and no growth in the three months to December 2025.

The ONS stated that the largest contribution to this growth was a 0.5% increase in services output. Production output jumped by 1.2% in the three months to February, while construction output dropped by 2%.

Despite this expansion in GDP, analysts are cautious of future results, with the latest figures not yet accounting for the full effect of the conflict in the Middle East.

Investment strategist at Quilter, Lindsay James, said that while the UK economy has “bounced back somewhat” following a fragile start to the year, this may be short lived.

She stated: "Given this will only have taken into account the first days of the US-Iran conflict, the true fallout, however, is yet to be felt, but nevertheless this will be a welcome relief to the Labour government. Growth has also been revised up to 0.3% in January too, suggesting that a recovery in the UK economy was underway prior to events in Iran kicking off at the end of February.

"2026 was the year the Government was hoping to build on following a challenging first 18 months in power, but all that work may have just been undone by events out of Labour’s control.

"Unfortunately for the Government, the worst is yet to come. Just this week, the IMF slashed its growth forecasts for the UK from 1.3% to 0.8% in 2026, the worst revision within the developed world. With the economy already achieving a run-rate of 0.8% growth on the same period last year, the implication is that headwinds will build from here on. Although the UK is expected to bounce back somewhat in 2027, the fact remains that the UK economy remains particularly at risk from global shocks.”

She added that the latest GDP update will put pressure on the Bank of England to cut rates across the year.

James concluded: "The market still expects it to cut at least once this year and with a fairly strong start to 2026, that may give it enough cover to do so. However, with growth now forecast by some to stall completely, the BoE is going to have to make a call on how much to look through any inflation spike and focus on the potential growth implications that are to follow. The UK economy has started 2026 well, but finds itself in a weakened position now, and any hikes could just cut off any green shoots that do survive this period."

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