Our monthly read on what moved investment markets over the past month and what it could mean looking ahead. This issue looks back at February.
In this issue
The economy barely grew at the end of 2025, but the early signs from this year were more encouraging, with business activity picking up. We look at inflation easing to a ten month low and what that meant for hopes of a rate cut, a record monthly surplus in the public finances ahead of the Spring Forecast, and a strong start to the year for retail sales.
The month in numbers
Growth was flat at the close of 2025, with the services sector standing still and construction having its worst quarter in four years. The mood lifted in the new year though, with business activity reaching its highest reading since April 2024. Inflation dropped to 3.0 per cent, a ten month low, which fed expectations of a rate cut to come. Add in a record monthly budget surplus of 30.4 billion pounds and retail sales rising 1.8 per cent in January, and the picture was brighter than the bare growth figures suggested.
