THE UK economy has grown quicker than expected as GDP rose by 0.5% in February, but experts warn that “the gains have already been eradicated” by the Iran war.
In the three months to February 2026, compared with the three months to November 2025, real gross domestic product (GDP) grew by 0.5%, following a growth of 0.3% in the three months to January 2026, and no growth in the three months to December 2025, Office for National Statistics (ONS) have revealed.
Services output grew by 0.5%, after showing a growth of 0.3% in the three months to January 2026. Production output grew by 1.2%, following a growth of 1.7% in the three months to January 2026.
Construction output fell by 2%, following falls of 2.8% in the three months to both January 2026 and December 2025.
In the month to February 2026, monthly GDP grew by 0.5% in February 2026, following a growth of 0.1% in January 2026 and 0.1% in December 2025.
Services and production both grew by 0.5%, and construction grew by 1% in February 2026.
Experts said, while these figures are encouraging, construction falling over the last three months is concerning – and, in any case, the effect of the Iran war will only start feeding into the data in the next couple of months.
The Middle East conflict is expected to lead to higher inflation in the UK and lead to higher energy prices in every part of the economy with businesses hit hard.
It’s hard to be excited about this rise in February
Craig Fish, Director at London-based Lodestone Mortgages, said the worrying sign was construction figures falling in the last three months.
He added: “These GDP figures look encouraging on the surface, 0.5% growth is positive. But scratch beneath and the picture is murkier. Construction falling 2% tells the real story – an economy under pressure, burdened by employer National Insurance hikes and fragile business confidence.
“Sadly, these figures feel more like a what-might-have-been than a springboard. I suspect this is the last good news we’ll see for some time. The Iran conflict is pushing oil prices higher, feeding into inflation and complicating the Bank of England’s rate-cutting path. That uncertainty will bleed into the data over coming months.
“Blame is a cocktail of poor fiscal timing from the Treasury, global instability, and swap rates refusing to fall. Borrowers are still waiting for meaningful mortgage relief but for buyers, now is the time to act. It’s a buyer’s market, sellers are negotiating, lenders are competing, and this window won’t last long. Don’t wait for a perfect moment that may never come.”
This highlights how fragile our economy has become
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said the figures will become irrelevant in the coming months as the effect of the Iran war feeds into the data.
He added: “It’s a real shame these figures become largely irrelevant given this represents the time before the Middle East conflict.
“This highlights how fragile our economy has become, within a month we have wound back 12 months of interest rate improvements, bail outs for energy needed and we are all staring down the barrel of higher inflation. It was good for the days it lasted.”
Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages, said he isn’t celebrating the rise in GDP.
He added: “A 0.5% increase in GDP would normally be celebrated as a significant step in the right direction.
“However it’s hard to be excited about this rise in February, knowing the gains have already been eradicated due to the geopolitical fallout over the subsequent March and April.”
