UK Economy Crawls to 0.1% Growth in Q4 2025 as Budget Uncertainty and Falling Investment Weigh on Recovery

The United Kingdom's economy limped into 2026 with quarterly growth of just 0.1% in the final three months of 2025, according to preliminary data published by the Office for National Statistics on Thursday UK economy grows by 0.1% despite uncertainty over Reeves’s budgettheguardian.com·SecondaryGDP in last three months of 2025 also hit by weak consumer spending, with little momentum going into this year The UK economy expanded by only 0.1% in the final three months of last year, according to official data, as falling business investment and weak consumer spending led to little momentum going into 2026. Figures from the Office for National Statistics (ONS) show that the economy grew at the same rate of 0.1% as the previous three months. This was less than a 0.. The figure matched the sluggish pace of the previous quarter and fell short of the 0.2% expansion economists had anticipated UK economy limps along at 0.1% growth – but there are reasons for optimism in 2026theguardian.com·SecondaryConsumers and businesses are not yet taking the hint despite six interest rate cuts UK economy grows by only 0.1% amid falling business investment Rachel Reeves has suggested 2026 is the year Labour can start to deliver on its economic promises; but 0.1% GDP growth in the final quarter of last year is hardly the springboard she was hoping for., underscoring the fragile state of Britain's recovery as Chancellor Rachel Reeves prepares to defend her economic record.

The data paints a picture of an economy struggling to find momentum despite six interest rate cuts from the Bank of England since mid-2024. Business investment declined 2.7% in the fourth quarter, while consumer spending managed only a tepid 0.2% increase UK economy limps along at 0.1% growth – but there are reasons for optimism in 2026theguardian.com·SecondaryConsumers and businesses are not yet taking the hint despite six interest rate cuts UK economy grows by only 0.1% amid falling business investment Rachel Reeves has suggested 2026 is the year Labour can start to deliver on its economic promises; but 0.1% GDP growth in the final quarter of last year is hardly the springboard she was hoping for.. The construction sector — central to Labour's ambitious housebuilding agenda — contracted by 2.1%, its worst quarterly performance in more than four years UK economy grows by 0.1% despite uncertainty over Reeves’s budgettheguardian.com·SecondaryGDP in last three months of 2025 also hit by weak consumer spending, with little momentum going into this year The UK economy expanded by only 0.1% in the final three months of last year, according to official data, as falling business investment and weak consumer spending led to little momentum going into 2026. Figures from the Office for National Statistics (ONS) show that the economy grew at the same rate of 0.1% as the previous three months. This was less than a 0..

Liz McKeown, the ONS director of economic statistics, noted the mixed nature of the figures. The often-dominant services sector, which accounts for roughly 80% of the UK economy, recorded zero growth over the quarter, she said UK economy limps along at 0.1% growth – but there are reasons for optimism in 2026theguardian.com·SecondaryConsumers and businesses are not yet taking the hint despite six interest rate cuts UK economy grows by only 0.1% amid falling business investment Rachel Reeves has suggested 2026 is the year Labour can start to deliver on its economic promises; but 0.1% GDP growth in the final quarter of last year is hardly the springboard she was hoping for.. Instead, the modest expansion was driven by manufacturing output, which rose 1.2% UK economy limps along at 0.1% growth – but there are reasons for optimism in 2026theguardian.com·SecondaryConsumers and businesses are not yet taking the hint despite six interest rate cuts UK economy grows by only 0.1% amid falling business investment Rachel Reeves has suggested 2026 is the year Labour can start to deliver on its economic promises; but 0.1% GDP growth in the final quarter of last year is hardly the springboard she was hoping for..

Over the full year 2025, GDP grew 1.3%, a marginal improvement on the 1.1% recorded in 2024 but well below the Office for Budget Responsibility's forecast of 1.5% . GDP per head — the measure more closely tied to living standards — rose 1%, after flatlining the previous year UK economy grows by 0.1% despite uncertainty over Reeves’s budgettheguardian.com·SecondaryGDP in last three months of 2025 also hit by weak consumer spending, with little momentum going into this year The UK economy expanded by only 0.1% in the final three months of last year, according to official data, as falling business investment and weak consumer spending led to little momentum going into 2026. Figures from the Office for National Statistics (ONS) show that the economy grew at the same rate of 0.1% as the previous three months. This was less than a 0.. The performance fell conspicuously short of Labour's pre-election pledge to deliver the highest sustained growth in the G7; Canada, under Prime Minister Mark Carney, achieved 1.6% growth in 2025 UK economy grows by 0.1% despite uncertainty over Reeves’s budgettheguardian.com·SecondaryGDP in last three months of 2025 also hit by weak consumer spending, with little momentum going into this year The UK economy expanded by only 0.1% in the final three months of last year, according to official data, as falling business investment and weak consumer spending led to little momentum going into 2026. Figures from the Office for National Statistics (ONS) show that the economy grew at the same rate of 0.1% as the previous three months. This was less than a 0..

Business groups and economists pointed to the confluence of factors dragging on activity. Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, said businesses had endured a particularly bleak quarter as the dark cloud of uncertainty caused by the budget and higher costs severely curtailed trade and investment plans UK economy limps along at 0.1% growth – but there are reasons for optimism in 2026theguardian.com·SecondaryConsumers and businesses are not yet taking the hint despite six interest rate cuts UK economy grows by only 0.1% amid falling business investment Rachel Reeves has suggested 2026 is the year Labour can start to deliver on its economic promises; but 0.1% GDP growth in the final quarter of last year is hardly the springboard she was hoping for.. The speculation surrounding Reeves's second budget in late November — which ultimately included a 25 billion pound employer national insurance rise — appeared to have a chilling effect on business confidence in the final months of the year UK economy grows by 0.1% despite uncertainty over Reeves’s budgettheguardian.com·SecondaryGDP in last three months of 2025 also hit by weak consumer spending, with little momentum going into this year The UK economy expanded by only 0.1% in the final three months of last year, according to official data, as falling business investment and weak consumer spending led to little momentum going into 2026. Figures from the Office for National Statistics (ONS) show that the economy grew at the same rate of 0.1% as the previous three months. This was less than a 0..

External headwinds compounded the domestic malaise. The Treasury has highlighted the instability created by Donald Trump's on-off tariff policies, which caused turmoil in financial markets and forced US-facing businesses to rethink supply chains UK economy grows by 0.1% despite uncertainty over Reeves’s budgettheguardian.com·SecondaryGDP in last three months of 2025 also hit by weak consumer spending, with little momentum going into this year The UK economy expanded by only 0.1% in the final three months of last year, according to official data, as falling business investment and weak consumer spending led to little momentum going into 2026. Figures from the Office for National Statistics (ONS) show that the economy grew at the same rate of 0.1% as the previous three months. This was less than a 0.. The cyber-attack on Jaguar Land Rover earlier in 2025 also depressed vehicle production and contributed to minimal growth in the third quarter UK economy limps along at 0.1% growth – but there are reasons for optimism in 2026theguardian.com·SecondaryConsumers and businesses are not yet taking the hint despite six interest rate cuts UK economy grows by only 0.1% amid falling business investment Rachel Reeves has suggested 2026 is the year Labour can start to deliver on its economic promises; but 0.1% GDP growth in the final quarter of last year is hardly the springboard she was hoping for..

Ruth Gregory, deputy chief UK economist at Capital Economics, observed that private sector activity still appeared extremely subdued UK economy limps along at 0.1% growth – but there are reasons for optimism in 2026theguardian.com·SecondaryConsumers and businesses are not yet taking the hint despite six interest rate cuts UK economy grows by only 0.1% amid falling business investment Rachel Reeves has suggested 2026 is the year Labour can start to deliver on its economic promises; but 0.1% GDP growth in the final quarter of last year is hardly the springboard she was hoping for.. However, she and other analysts noted that more recent forward-looking surveys for January suggested a tentative pickup in business and consumer sentiment, with some economists projecting growth of 0.4% in the first quarter of 2026 UK economy limps along at 0.1% growth – but there are reasons for optimism in 2026theguardian.com·SecondaryConsumers and businesses are not yet taking the hint despite six interest rate cuts UK economy grows by only 0.1% amid falling business investment Rachel Reeves has suggested 2026 is the year Labour can start to deliver on its economic promises; but 0.1% GDP growth in the final quarter of last year is hardly the springboard she was hoping for..

The Bank of England kept interest rates on hold at 3.75% at its early February meeting but signalled that further cuts could follow. Policymakers pointed to the disinflationary effect of Reeves's budget measures, including energy bill reductions, as a factor that could bring inflation back toward target and pave the way for a seventh rate cut, potentially as soon as April UK economy grows by 0.1% despite uncertainty over Reeves’s budgettheguardian.com·SecondaryGDP in last three months of 2025 also hit by weak consumer spending, with little momentum going into this year The UK economy expanded by only 0.1% in the final three months of last year, according to official data, as falling business investment and weak consumer spending led to little momentum going into 2026. Figures from the Office for National Statistics (ONS) show that the economy grew at the same rate of 0.1% as the previous three months. This was less than a 0.. Samuel Edwards, head of client portfolio management at Ebury, said businesses would be pleased to have at least a sliver of positive economic news after a turbulent week in UK politics, though concerns remained around the slowing jobs market and sticky inflation.

Reeves herself struck a defiant tone, insisting on Wednesday that Labour could win the political argument for a closer relationship with the European Union. She maintained that the government had the right economic plan to build a stronger and more secure economy UK economy limps along at 0.1% growth – but there are reasons for optimism in 2026theguardian.com·SecondaryConsumers and businesses are not yet taking the hint despite six interest rate cuts UK economy grows by only 0.1% amid falling business investment Rachel Reeves has suggested 2026 is the year Labour can start to deliver on its economic promises; but 0.1% GDP growth in the final quarter of last year is hardly the springboard she was hoping for.. But the data arrives at an awkward moment, with speculation swirling about a potential Labour leadership challenge against Keir Starmer — a prospect that Thomas Pugh of consultancy RSM warned could reopen Pandora's box of tax increases and inject renewed uncertainty into the recovery UK economy grows by 0.1% despite uncertainty over Reeves’s budgettheguardian.com·SecondaryGDP in last three months of 2025 also hit by weak consumer spending, with little momentum going into this year The UK economy expanded by only 0.1% in the final three months of last year, according to official data, as falling business investment and weak consumer spending led to little momentum going into 2026. Figures from the Office for National Statistics (ONS) show that the economy grew at the same rate of 0.1% as the previous three months. This was less than a 0..

Fergus Jimenez-England, an associate economist at the National Institute of Economic and Social Research, urged the chancellor to support the tentative improvement in sentiment by avoiding further policy changes at next month's spring statement from the OBR UK economy limps along at 0.1% growth – but there are reasons for optimism in 2026theguardian.com·SecondaryConsumers and businesses are not yet taking the hint despite six interest rate cuts UK economy grows by only 0.1% amid falling business investment Rachel Reeves has suggested 2026 is the year Labour can start to deliver on its economic promises; but 0.1% GDP growth in the final quarter of last year is hardly the springboard she was hoping for.. Scott Gardner, investment strategist at J.P. Morgan Personal Investing, struck a cautiously optimistic note, pointing out that manufacturing activity picked up in January and the services industry saw a decent influx of new business, which could grease the wheels of the economy over 2026.

The question now is whether the combination of monetary easing, fiscal stabilisation, and recovering business confidence can overcome the structural challenges — from low productivity growth to global trade uncertainty — that have kept Britain's recovery stubbornly modest. With the OBR expecting annual growth of just 1.5% through to 2030, the road ahead looks less like a springboard and more like a slow uphill climb.