Growth figures ‘a dividend from stable government’, claims minister – UK politics live

Official data reveals the UK economy experienced an unforeseen expansion of 0.5% in February, offering a temporary respite for Chancellor Rachel Reeves as the shadow of Donald Trump’s tariff war looms. This positive economic growth figure comes ahead of anticipated economic headwinds.

The increase in gross domestic product (GDP) for February, which reverses a slight contraction in January, may represent the final phase of economic expansion. The looming threat of a global trade conflict is expected to curtail both business investment and consumer expenditure in the near future.

Economic analysts had predicted a more modest growth of 0.1% for February, making the actual figure a significant upward surprise.

Households are facing increased financial strain this month due to rising utility bills and council tax, outpacing inflation, while businesses are adjusting to a substantial £25 billion tax increase.

Political opponents are likely to criticize the government, alleging that recent tax policies implemented in October’s budget have led to a period of economic stagnation.

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Chancellor Rachel Reeves has issued a statement acknowledging the unexpectedly positive monthly GDP figures for February.

These growth figures represent an encouraging indication, though we are not becoming complacent. Recent weeks have demonstrated the extent of global change.

I understand that this is a period of unease for households concerned about living costs and for British businesses apprehensive about the implications of this evolving landscape.

This administration will maintain a pragmatic and composed approach as we strive to secure the most advantageous agreement with the US, always prioritizing our national interests.

Concurrently, we will maintain unwavering dedication to stimulating economic expansion, ensuring financial security for working individuals, and fostering national renewal for Britain.

Responding to the 0.5% GDP growth, Shadow Chancellor Mel Stride stated, “Since Labour assumed power, their policy decisions have effectively stifled all economic growth.”

The shadow chancellor contended that “there remains a significant distance to cover for a genuine recovery.”

In reference to Chancellor Rachel Reeves’ spring fiscal statement, Stride commented, “At the emergency budget, projections for growth, inflation, and borrowing deteriorated due to Labour’s choices. Hardworking families deserve better than a government boasting about sluggish growth while they face a £3,500 reduction in income because of the jobs tax.”

Care Minister Stephen Kinnock has attributed the unexpectedly strong GDP growth figures for February to “the dividend of a stable government.”

Speaking on Sky News, the Labour MP representing Aberafan Maesteg elaborated:

I believe what we are witnessing is the positive outcome of a government that is stable, dedicated to its growth objectives, and fully committed to supporting businesses nationwide by facilitating investment and providing essential certainty.

He further explained that the government is “streamlining planning processes to empower businesses to invest” and highlighted Labour’s introduction of “new employee rights, which I believe will significantly improve employer-employee relations across the economy.”

Kinnock also emphasized the Labour government’s increases to minimum wage levels, stating:

We are seeing the positive impacts of the rise in the living wage, which I believe is contributing to injecting more capital into the economy and bolstering consumer confidence. This combination of supply-side and demand-side strategies is instrumental in developing a future-proof economy.

Liberal Democrat education spokesperson Munira Wilson, speaking on LBC News, acknowledged “these initial signs of recovery” following the 0.5% GDP increase in February. However, she cautioned that this growth “risks being stifled by the jobs tax,” referring to the increase in employer national insurance contributions.

Wilson explained that “additional financial burdens, stemming from national insurance increases and rising business rates on high streets, are impeding economic growth. This translates to reduced government revenue available for reinvestment in essential public services such as schools and hospitals.”

Conservative shadow environment minister Robbie Moore addressed the media today, stating, “naturally, we welcome any growth figures” when questioned about February’s GDP data.

However, Moore also voiced concerns regarding the broader economic trajectory, telling Sky News viewers:

This pertains only to February, and we are aware of the OBR’s significant cautions regarding the year ahead, projecting a slowdown in growth. Furthermore, this is prior to the implementation of numerous punitive tax increases this month, such as the jobs tax, employer national insurance hikes, minimum wage increases, and business rate adjustments.

Therefore, while we acknowledge this positive figure, based on recent discussions with manufacturing and engineering firms in my Keighley constituency, business confidence remains considerably low.

A senior economic advisor to Donald Trump indicated that securing a better tariff rate than the 10% currently imposed by the US globally would require “an extraordinary deal” for any nation, including the UK. This statement casts doubt on Downing Street’s aspirations for a favorable trade agreement.

Speaking to CNBC, Kevin Hassett, an economist and advisor to Trump, suggested any agreement leading the president to lower tariffs would necessitate being “extraordinary.”

“I believe the prevailing expectation is that the 10% baseline tariff will remain in place,” Hassett stated. “It would take a truly exceptional deal to persuade the president to consider a reduction below that level.”

Despite the UK’s pursuit of reduced tariffs through a bilateral trade agreement, Downing Street has consistently emphasized that the global landscape has shifted, necessitating the UK to explore alternative strategies for economic expansion and partnerships.

Related: Trump’s economic adviser dampens Starmer’s hopes of tariffs relief

Good morning and welcome to our ongoing UK political briefing for Friday. Here’s a summary of today’s top stories:

• The UK economy demonstrated unexpected growth of 0.5% in February, according to official figures, providing a boost for Chancellor Rachel Reeves ahead of a predicted downturn potentially triggered by Donald Trump’s tariff policies.

• The Chancellor commented that these growth figures are “an encouraging sign, but we are not complacent,” while Shadow Chancellor Mel Stride argued that the rise indicated growth had been effectively “stifled.”

• Keir Starmer has confirmed he has not yet engaged in discussions with the US President following the implementation of trade tariffs that have destabilized the global economy.

• A significant fine imposed on the University of Sussex for freedom of speech breaches has raised broader concerns across the education sector.

• The UK and Germany are jointly presiding over a meeting in Brussels focused on support for Ukraine. The government has announced a £450 million increase in military aid to Ukraine.

Parliament is currently in recess, but local campaigning is underway for the upcoming council elections in England next month. Liberal Democrat leader Ed Davey is scheduled to visit the River Severn in Shrewsbury as part of these efforts. Additionally, the funeral of former Scottish government minister Christina McKelvie will take place in Glasgow.

Martin Belam is your guide today. Please feel free to contact me at [email protected] to report any typos, perceived errors, omissions, or if you have any inquiries.