The UK economy posted unexpectedly strong growth in February 2025, with gross domestic product (GDP) rising by 0.5% month-on-month, according to the Office for National Statistics (ONS). This figure marks a significant rebound from January’s modest 0.1% decline and signals robust activity across multiple sectors. However, while the headline number paints an optimistic picture, growing scepticism surrounds the ONS data, with commentators questioning the reliability of the figures due to substantial variances and methodological concerns.
A Broad-Based Surge in Growth
The ONS reported that February’s GDP growth was driven by widespread gains across key sectors. Services, which account for roughly 80% of the UK economy, expanded by 0.6%, with strong performances in retail, hospitality, and administrative services. Manufacturing and industrial production also contributed positively, rising by 0.8% and 0.7%, respectively, buoyed by machinery and pharmaceuticals. Construction, often a volatile sector, grew by 0.4%, supported by infrastructure projects and a milder-than-expected winter.
This broad-based uptick follows a shaky second half of 2024, where the UK economy flirted with stagnation. For context, GDP grew by just 0.9% for the whole of 2024, a step up from 2023’s 0.4% but still reflective of structural challenges. The February bounce suggests that looser monetary policy—interest rates have fallen by 75 basis points from their peak—and increased public spending may be gaining traction. Consumer confidence, bolstered by real wage growth and easing inflation (currently at 2.5%), has likely fuelled spending, particularly in services. Additionally, global trade uncertainties, including potential US tariffs, have not yet materially disrupted UK exports, allowing manufacturers to capitalise on existing demand.
Why the Higher Growth?
Several factors explain the apparent acceleration. First, monetary easing by the Bank of England has reduced borrowing costs, encouraging business investment and household spending. The base rate, now at 4.5%, is expected to fall further, with markets pricing in cuts to 3.75% by year-end. Second, fiscal policy has played a role. The Labour government, in power since mid-2024, has prioritised growth through targeted spending, including infrastructure and defence, which likely supported construction and related industries. Third, seasonal factors, such as a strong retail performance ahead of spring, may have amplified services output.
On the supply side, manufacturing has benefited from resolved supply chain bottlenecks and stable energy prices, despite geopolitical tensions. Meanwhile, a weaker pound—down 5% against the dollar since October 2024—has made UK exports more competitive, cushioning trade-exposed sectors. These dynamics align with forecasts from some analysts, like KPMG, who projected UK GDP could hit 1.7% in 2025 if consumer spending and policy support hold firm.
Suspicions Surrounding the ONS Figures
Despite the upbeat data, the ONS’s numbers have sparked significant controversy. Critics argue that the reported 0.5% growth is highly suspect, pointing to inconsistencies in recent data releases and methodological issues. The ONS itself acknowledged in early 2025 that several of its economic indicators, including GDP estimates, suffer from reliability concerns due to low response rates in surveys like the Labour Force Survey and challenges integrating real-time data, such as Pay As You Earn earnings. These weaknesses introduce volatility, making monthly figures prone to revisions.
The size of February’s growth—a jump from January’s -0.1% to +0.5%—has raised eyebrows. Such a sharp swing is statistically unusual and contrasts with broader economic signals. For instance, business sentiment surveys, like those from the CBI, indicate declining confidence, with firms planning to cut hiring and investment in early 2025. Consumer spending, while resilient, faces headwinds from rising energy costs and potential tax hikes flagged in the upcoming Spring Statement. These “red warning signs,” as some analysts have dubbed them, clash with the ONS’s rosy portrayal.
Commentators Question Validity
Prominent voices in economics and finance have openly doubted the ONS figures. Many argue that the variance in monthly GDP estimates—often revised significantly in later releases—undermines their credibility. For example, quarterly GDP for Q4 2024 was initially reported as 0.1% but could face adjustments when the ONS releases its next estimate on April 11, 2025. Historical revisions, such as those in the 2024 Blue Book, have shown GDP data shifting by as much as 0.3 percentage points, eroding trust.
Sceptics also highlight structural issues. The UK’s productivity growth remains sluggish, with GDP per capita down 0.1% in 2024, suggesting living standards are not keeping pace with headline growth. If February’s figures were accurate, they imply a sudden productivity surge that lacks supporting evidence from employment or investment data. Moreover, global uncertainties—US trade policy shifts, Middle East tensions, and eurozone weakness—should theoretically weigh heavier on an open economy like the UK’s, casting further doubt on the reported strength.
Some commentators speculate that the ONS may be overcorrecting for earlier underestimates, particularly after criticism that 2024’s growth was understated. Others suggest political pressures could be influencing data presentation, though no concrete evidence supports this claim. Regardless, the consensus is that while the economy may be growing, the ONS’s numbers likely overstate the pace, and caution is warranted.
Looking Ahead: Optimism or Overstatement?
The February GDP figures offer a glimmer of hope for a UK economy grappling with low growth and high uncertainty. If sustained, this trajectory could push 2025 growth toward the Office for Budget Responsibility’s 1.0% forecast or even the IMF’s more optimistic 1.6%. However, the cloud of doubt hanging over the ONS data tempers enthusiasm. With critical indicators flashing warning signs and revisions looming, the true state of the economy remains murky.
As Chancellor Rachel Reeves prepares for the Spring Statement, she faces a delicate balancing act: leveraging apparent momentum without over-relying on questionable data. For now, businesses and households should brace for volatility, as the UK’s economic path in 2025 hinges as much on statistical clarity as it does on policy and global conditions.
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