Some excellent news for the British financial system – however the celebration may not final lengthy

We have been ready for some time for the Workplace for Nationwide Statistics to ship us some excellent news on the British financial system – and right now it got here.

Output grew by 0.5% in February, up from zero development in January and better than the 0.1% forecast by economists.

Some typical caveats apply. Month-to-month information could be risky and vulnerable to revision – however it could possibly go up in addition to down.

Whereas publishing the most recent figures, the ONS additionally revised up its January determine from -0.1% to zero.

The massive shock was manufacturing.

Enterprise surveys informed us that UK factories had been on their knees, anxious about Trump’s tariffs and impending tax rises that got here into impact in April.

But the manufacturing sector grew by 1.5% – led by prescription drugs, metals and transport tools. Companies have been resilient.

The chancellor will likely be happy, however the celebrations are prone to be fleeting.

The world has already moved on, with Donald Trump unleashing coverage chaos on the worldwide financial system.

Britain is now going through a ten% tariff on exports to the US and there will likely be pockets of acute stress, significantly for our automotive producers, who’ve been hit with a 25% tariff.

They export extra to the US than some other nation on this planet. Certainly, among the development in manufacturing could have been pushed by companies speeding to do offers earlier than tariffs got here into pressure.

The tariffs alone on the UK will likely be painful – however probably the most vital injury is prone to come from a slowdown within the world financial system.

The US and China are engaged in a tit-for-tat commerce warfare and that may have adverse spillovers, particularly for an open financial system like ours. We cannot escape the fallout.

Companies right here within the UK would possibly curtail hiring and funding in response, their hesitancy compounded by uncertainty over what Donald Trump would possibly do subsequent.

Customers may retreat, particularly if the pound weakens and imports develop into costlier, inflicting inflationary penalties.

So, whereas we have lastly been given one thing to cheer, darker days beckon. We must always take pleasure in it whereas it lasts.