The UK economy demonstrated modest resilience in the final quarter of 2025, expanding by 0.1% despite ongoing pressures from budgetary uncertainty, according to newly released official data.
Quarterly Growth Figures and Context
The Office for National Statistics (ONS) reported that gross domestic product (GDP) increased by 0.1% between October and December 2025. This growth rate precisely matches the 0.1% expansion recorded in the third quarter of the same year, indicating a period of stable but subdued economic performance.
Monthly Fluctuations and Sectoral Impacts
Earlier ONS data revealed a contraction of 0.1% in October, followed by a more robust expansion of 0.3% in November. This November surge was partly attributed to a recovery in the manufacturing sector, specifically driven by restored production at Jaguar Land Rover after a significant cyber attack disrupted operations.
Some analysts had anticipated that fourth-quarter growth might edge slightly higher, buoyed by stronger-than-expected activity in November and potential clarity from the autumn Budget that could have supported businesses during the crucial Christmas trading period.
Revised Bank of England Forecasts
In a parallel development, the Bank of England announced a downward revision to its growth forecasts on Thursday. The central bank now projects growth of 0.9% for 2026, reduced from an earlier estimate of 1.2%. For 2027, the forecast has been adjusted to 1.5%, down from 1.6%.
These revisions underscore broader concerns about the UK's economic trajectory, even as the latest quarterly data confirms a continuation of marginal growth. The persistent budget uncertainty continues to cast a shadow over business confidence and investment decisions, potentially constraining more vigorous economic expansion in the near term.
