Britain's Economy Surged in February — Then the War Hit

Editorial digest April 16, 2026
Last updated : 08:17

The Office for National Statistics delivered a number on Thursday that would, in any other week, trigger cautious optimism across Westminster. Britain's economy expanded by 0.5% in February — five times the forecast, with January's previously reported flatline revised upward to 0.1% growth. Good news. Except the war started in March. The data is already a relic.

A Strong February That History Will Footnote

There is something almost cruel about the timing. The ONS figures confirm what several business surveys had hinted at: the UK economy had genuine momentum at the start of the year. According to Andrew Hunter, associate director at Moody's Analytics, the jump "echoes the earlier improvement in the surveys and suggests the economy had more momentum at the start of this year than previously thought." Hunter adds the obvious caveat — "with those surveys weakening quite sharply in March as the Middle East conflict sent energy prices soaring, this upturn is likely to prove short lived."

So here we are. A government that has spent months defending its economic credibility now holds a statistic that flatters a period that no longer exists. For Keir Starmer, the 0.5% figure is a talking point with a short shelf life. The Iran war has reshuffled the economic deck, and pre-war GDP data is roughly as useful as a weather report from last month.

The more honest question is what February's strength actually tells us. It suggests underlying domestic demand wasn't as anaemic as feared — consumer spending, services, some industrial recovery. But Britain's structural vulnerabilities — energy import dependency, thin household buffers, a housing market held together by low transaction volumes — were always going to make any external shock bite harder here than elsewhere.

Tesco's Caution Should Worry More Than It Does

The most grounded signal of what comes next came not from economists, but from Tesco's boardroom. Britain's largest supermarket posted annual profits up 8.5% to £2.4 billion and hit its highest market share in a decade. Numbers that should, in a normal cycle, generate genuine boardroom confidence. Instead, Tesco issued a profits warning for the year ahead, citing "increased uncertainty caused by the conflict in the Middle East."

Read that again. A company at its commercial peak — record market share, strong profits — is openly signalling that it cannot commit to holding those gains. The reasons are not opaque. Fuel costs embedded in supply chains, energy overheads in refrigeration and logistics, potential second-round effects on food prices as global commodity markets absorb the shock of sustained Middle East disruption.

Tesco is not the sort of company that warns unless the warning is necessary. The retailer's cautious investor messaging sits in deliberate contrast to its headline numbers — which is exactly the point. When the UK's most commercially successful grocer flags uncertainty, it is communicating something that GDP data, released six weeks after the fact, structurally cannot.

The risk is that consumers absorb a further squeeze. Tesco's strength partly reflects a defensive shift by shoppers — trading down from premium rivals, doubling down on meal deals and own-brand. That resilience has limits. If energy costs seep into food prices through the summer, the same households who drove February's consumption uptick will pull back. The feedback loop is visible. The question is speed.

The Farage Bitcoin Sideshow Gets Its Inevitable Punchline

Separate from the macro noise, a smaller but politically pointed story surfaced this week. Jai Patel, the chief executive of Stack BTC — the bitcoin firm that launched in March to considerable fanfare, with Nigel Farage and former chancellor Kwasi Kwarteng among its first shareholders — has resigned. The company, which was relaunched from a previously liquidated crypto firm, framed the departure around its commitment to delivering "long-term value for shareholders."

The politics here deserve at least a raised eyebrow. Farage has leant his name — and his follower base — to a financial product whose CEO has now exited weeks after launch. Stack BTC was founded by Paul Withers, described as a friend of the Reform UK leader and also the owner of Direct Bullion, another venture Farage has promoted. The overlap between Farage's political platform and his commercial endorsements is not new. The speed of the Stack BTC executive departure, however, is notable.

This is not, by itself, a scandal. CEOs leave early-stage companies. But for a figure who has built his brand on speaking for the financially squeezed and the culturally sceptical, the optics of championing a relaunched crypto firm whose leadership collapses within weeks are exactly the kind of contradiction that deserves scrutiny. Farage's supporters deserve to know what happened to the firm he put his name behind.

What to watch: Tesco's guidance revision will likely not be the last from a major UK retailer. The February GDP print will be cited frequently by ministers and quickly buried by April's data. And Stack BTC, whatever it claims about long-term value, now has a short-term credibility problem — with or without Farage's endorsement.