Some good news for the British economy – but the celebration might not last long
We’ve been waiting for a while for the Office for National Statistics to deliver us some good news on the British economy – and today it came.
Output grew by 0.5% in February, up from zero growth in January and higher than the 0.1% forecast by economists.
Some usual caveats apply. Monthly data can be volatile and prone to revision – but it can go up as well as down.
While publishing the latest figures, the ONS also revised up its January figure from -0.1% to zero.
It’s clear that, across the economy, sectors performed robustly.
The big surprise was manufacturing.
Business surveys told us that UK factories were on their knees, anxious about Trump’s tariffs and impending tax rises that came into effect in April.
Yet the production sector grew by 1.5% – led by pharmaceuticals, metals and transport equipment. Businesses have been resilient.
The chancellor will be pleased, but the celebrations are likely to be fleeting.
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Analysis: Trump blinks as bonds falter
The world has already moved on, with Donald Trump unleashing policy chaos on the global economy.
Britain is now facing a 10% tariff on exports to the US and there will be pockets of acute stress, particularly for our car manufacturers, who have been hit with a 25% tariff.
They export more to the US than any other country in the world. Indeed, some of the growth in manufacturing may have been driven by businesses rushing to do deals before tariffs came into force.
The tariffs alone on the UK will be painful – but the most significant damage is likely to come from a slowdown in the global economy.
The US and China are engaged in a tit-for-tat trade war and that will have negative spillovers, especially for an open economy like ours. We won’t escape the fallout.
Businesses here in the UK might curtail hiring and investment in response, their hesitancy compounded by uncertainty over what Donald Trump might do next.
Consumers may also retreat, especially if the pound weakens and imports become more expensive, causing inflationary consequences.
So, while we’ve finally been given something to cheer, darker days beckon. We should enjoy it while it lasts.
Nigel Farage has successfully exploited the Commons recess to “grab the mic” and “dominate” the agenda, Harriet Harman has said.
Speaking on Sky News’ Electoral Dysfunction podcast, the Labour peer said that the Reform UK leader has been able to “get his voice heard” while government was not in “full swing”.
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Mr Farage used a speech this week to set himself, rather than Kemi Badenoch’s Tories, up as the main opposition to Sir Keir Starmer at the next election.
The prime minister responded on Thursday with a speech attacking the Clacton MP.
Baroness Harman said: “It’s slightly different between opposition and government because in government, the ministers have to be there the whole time.
“They’ve got to be putting legislation through and they kind of hold the mic.
“They can dominate the news media with the announcements they’re making and with the bills they’re introducing, and it’s quite hard for the opposition to get a hearing whilst the government is in full swing.
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‘Big cuts’ to fund other Reform UK policies
“What we used to do when we were in opposition before 1997 is that as soon as there was a bank holiday and the House was not sitting, as soon as the half-term or the summer recess, we would be on an absolute war footing and dominate the airwaves because that was our opportunity.
“And I think that’s a bit of what Farage has done this week,” Harman added.
“Basically, Farage can dominate the media agenda.”
She went on: “He’s kind of stepped forward, and he’s using this moment of the House not sitting in order to actually get his voice heard.
“It’s sensible for the opposition to take the opportunity of when the House is not sitting to kind of grab the mic and that is what Nigel Farage has done.”
But Baroness Harman said it “doesn’t seem to be what Kemi Badenoch’s doing”.
She explained that the embattled leader “doesn’t seem to be grabbing the mic like Nigel Farage has” during recess, and added that “there’s greater opportunity for the opposition”.
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