The British economy showed signs of continued recovery in February as the composite PMI rose to 53.9, reflecting the strongest growth in business activity since April 2024.
The data suggested GDP growth of around 0.3% in the first quarter, up from just 0.1% in the final quarter of 2025. This comes as budget uncertainty eases.
January retail sales also showed a strong increase, recording the fastest annual growth in almost four years, although it was weighed down by niche sectors such as commercial art and jewellery.
Prices charged to businesses rose at the fastest pace since April, but cost pressures rose at a slower pace, providing some relief to firms.
However, employment levels continued to fall, particularly in the services sector, as employers faced higher social security costs.
With annual growth expected at around 0.9%, the Bank of England is expected to cut interest rates next month, although the rigidity of inflation remains a concern among policymakers.
