Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The UK economy grew 0.5 per cent in February, beating analysts’ expectations and providing some positive news for chancellor Rachel Reeves as she contends with the impact of US President Donald Trump’s tariffs.

Friday’s monthly GDP figure from the Office for National Statistics was above both the 0.1 per cent increase forecast by economists polled by Reuters and January’s figure of zero growth, revised up from a previous estimate of a 0.1 per cent contraction.

ONS Director of Economic Statistics Liz McKeown said: “The economy grew strongly in February with widespread growth across both services and manufacturing industries.”

She said that computer programming, telecoms and car dealerships all had strong months, while in manufacturing, electronics and pharmaceuticals led the way. Car manufacturing also picked up after its recent poor performance.

The figures predate Trump’s announcement on April 2 that he would impose steep import tariffs on most countries in the world, including a 10 per cent levy for the UK. The move triggered a sharp fall in global stock markets and prompted fears of a recession on both sides of the Atlantic.

On Wednesday, the US president announced a 90-day pause on most of his “reciprocal” duties, but the UK’s tariffs remain in place.

Given the increased risks to the UK economy, investors now expect that the Bank of England will next cut interest rates in May, and then lower borrowing costs twice more before the end of the year.

This is a developing story.