UK Economy Sees Unexpected Growth in February as US Exports Surge Ahead of Tariffs

The UK economy grew 0.5% in February, surpassing forecasts. A surge in exports to the US preceded new tariffs, raising concerns about future growth.

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UK Economy Expands Beyond Expectations

The UK economy grew by 0.5% in February 2025—outpacing economists’ predictions of just 0.1% %—according to official Office for National Statistics (ONS) data. The growth was primarily driven by a rebound in the services sector and a notable increase in manufacturing activity.

At the same time, UK exports to the United States climbed by £500 million as businesses raced to ship goods before the full impact of sweeping US tariffs took effect.

“There are clear signs that UK firms increased goods exports to the US ahead of the introduction of tariffs,” said William Bain, Head of Trade Policy at the British Chambers of Commerce (BCC).

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Tariffs Prompt Export Surge to the US

Goods exports from the UK to the US have risen for the third consecutive month, reaching their highest level since November 2022. The ONS noted that total goods exports rose by 23% over the past three months alone.

The spike comes amid newly imposed US tariffs:

• A 25% tariff on UK steel and aluminium, effective 12 March

• A blanket 10% tariff on most other UK imports to the US, implemented this week

“Securing a deal with the US and removing trade barriers with the EU will be key to cushioning the negative impacts of the sweeping new US tariffs,” Bain added.

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Services Sector Drives Domestic Growth

The UK’s services industry saw strong performance in February, particularly in:

• Computer programming and telecoms

• Automotive retail and repairs

Liz McKeown, ONS Director of Economic Statistics, said, “manufacturing, electronics and pharmaceutical businesses performed well, with the car industry also rebounding from recent struggles.”

The latest data revises January’s GDP from a 0.1% contraction to flat growth. The more stable three-month rolling average now shows a 0.6% rise.

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Political Reactions and Future Outlook

Chancellor Rachel Reeves called the growth “an encouraging sign” but acknowledged the challenges ahead:

“We must go further and faster to kickstart economic growth, provide security for working people, and put more money in their pockets.”

Shadow Chancellor Mel Stride criticised Labour’s economic record:

“Since coming to office, Labour’s choices have killed growth stone dead. There is still a long way to go to recover.”

Deputy Chief UK Economist Ruth Gregory warned, “surprisingly strong growth will prove short-lived, as rises in tariffs and taxes bite.”

The economy has only grown in four of the past nine months, suggesting that while recession fears may be overstated, consistent recovery remains elusive.

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On the Ground: Business Feels the Strain

Mitchell Barnes, founder of a 3D printing firm in Warwickshire, exports 50% of his automotive parts to the US. However, domestic economic policy may impact his plans, particularly changes to national insurance and minimum wage.

“We were planning to expand our staff from 27 to 100 over the next 18 months,” said Barnes. “Now, we’re scaling back to a target of 30 to 40.”

The company is accelerating its expansion plans in the United States instead, as UK-based operations become more costly.

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The UK’s better-than-expected economic performance in February offers short-term reassurance but does little to shield the economy from looming headwinds. With the full impact of US tariffs yet to be felt, alongside domestic tax rises and cost pressures, sustained growth may remain difficult.

February’s economic data shows resilience—but without strategic trade negotiations and domestic support for businesses, the gains may be temporary.