Shock boost for the Chancellor at the end of a turbulent week
Professor Joe Nellis April 11th 2025
Professor Joe Nellis is the Chief Economic Advisor to MHA. With 0.5% GDP growth in February, Joe explores what more the government needs to do to reignite the UK ecomony.
Growth in GDP for February of 0.5% is a marked improvement from January’s flatlining growth in a surprise boost for the Chancellor, as increased government spending outlined in the October Budget begins to filter into the economy.
This is a good start, but much more will have to be done if the Government are to reignite the economy.
With the Spring Statement having come and gone, focus has shifted in the past week away from the domestic economy as Trump’s tariff onslaught (and backtracking) has caused global uncertainty and extreme market volatility.
Despite February's growth, the combination of domestic stagnation and global instability means that the UK’s economic environment is at its most uncertain since the COVID-19 Pandemic. This is not a good foundation for the sustainable growth the Chancellor so desperately needs if she is to maintain the slim fiscal headroom that she manufactured in her Spring Statement and calm the now genuine fears of recession.
Global economy outlook
"The outlook for the global economy is challenging and the threat of a downturn looms large over the geopolitical soap opera surrounding the US administration.
Elon Musk has this week called for a ‘free trade zone’ between the US and Europe including the UK — given the influence he has on the President, does this offer a glimmer of hope for a change in fortunes for the embattled British economy?
The chaos of the last week suggests that your guess is as good as mine."
