The UK economy expanded by just 0.1% in the final quarter of 2025, official figures show, as falling business investment and weak consumer spending dragged on growth. The Office for National Statistics (ONS) said gross domestic product (GDP) grew at the same rate as the previous three months, below the 0.2% forecast by economists.
For the full year, the economy grew by 1.3%, an improvement on 1.1% in 2024 but worse than the 1.5% official forecast. The dominant services sector, which accounts for about 80% of the economy, recorded no growth. Instead, the small rise was driven by a 1.2% increase in production, while construction shrank by 2.1% – its worst performance in four years.
Business investment fell by 2.7% in the quarter, and consumer spending rose by a sluggish 0.2%. The data suggests that uncertainty ahead of the autumn Budget, which included significant tax rises, led households and companies to hold back spending and investment decisions.
“The economy continued to grow slowly in the last three months of the year,” said Liz McKeown, ONS director of economic statistics. “The often-dominant services sector showed no growth, with the main driver instead coming from manufacturing.”
Chancellor Rachel Reeves is expected to deliver a major speech in the coming weeks, insisting she will stick to her growth plan and reviving the term “securonomics”. Treasury sources said priorities include opportunities in artificial intelligence and closer ties with the EU.
Despite the weak end to 2025, surveys for January suggest business and consumer sentiment has picked up, with economists forecasting 0.4% growth in the first quarter of 2026. The Office for Budget Responsibility had predicted 1.5% growth for 2025 and 1.4% for 2026.
