Britain's Surprising Economic Growth Amid U.S. Tariff Concerns

Britain's economy grew by 0.5% in February, unexpectedly surpassing forecasts. Despite concerns over U.S. tariffs, the GDP showed significant improvement, driven by manufacturing gains. However, underlying private sector momentum remains weak, as businesses contend with rising employment taxes and wage hikes. The market remains tense amid ongoing U.S. trade policy threats.

In February, Britain's economy demonstrated unexpected resilience with a notable 0.5% growth in GDP, according to official data. This figure defied economists' forecasts and marked the strongest monthly expansion since March 2024. Finance Minister Rachel Reeves expressed encouragement, yet the pound showed little response to these developments.

Amid the growth figures, U.S. President Donald Trump's tariff announcements have sparked market concerns, overshadowing domestic economic performance. The Bank of England's Deputy Governor highlighted potential repercussions of these tariffs, which could increase the cost of British exports to the U.S. by 10% or more.

Despite a promising start to 2025, long-term growth forecasts remain uncertain. The Confederation of British Industry notes that while the February uptick is promising, the private sector's underlying momentum is still fragile, compounded by heightened employment taxes and wage pressures.

(With inputs from agencies.)