The ONS’s February 2026 figures delivered a rare upside surprise: UK GDP rose 0.5% month‑on‑month, the strongest expansion in more than two years and five times the consensus forecast of 0.1%.
How can forecasts be so wrong?
January2026 was also revised up to 0.1%, overturning the earlier flat reading. On the surface, this looks like the economy finally pulling out of its shallow recession.
In reality, it is a snapshot of momentum that has already been overtaken by events.
Services mani
The growth was broad‑based. Services, which make up over three‑quarters of the economy, expanded 0.5%, marking a fourth consecutive monthly rise.
Production also grew 0.5%, and construction jumped 1.0%. Even the three‑month measure—less noisy than monthly data—showed UK GDP up 0.5%, compared with 0.3% previously. This is the kind of balanced improvement policymakers have been waiting for.
But the timing matters. These numbers capture the economy before the U.S.-Israel-Iran conflict triggered a fresh energy shock at the end of February.
IMF downgrade
Since then, petrol, diesel and heating oil prices have surged, mortgage rates have ticked higher as markets price out rate cuts, and the IMF has downgraded the UK’s 2026 growth outlook to 0.8%.
So February’s strength is real—but it is also backward‑looking. The challenge now is whether any of that momentum survives the shock hitting households and firms this spring.