The UK economy expanded by just 0.1% in the final quarter of 2025, according to official figures from the Office for National Statistics (ONS), missing economists' expectations of 0.2% growth. The weak performance was driven by a 2.7% fall in business investment and sluggish consumer spending, which rose only 0.2%.
The services sector, which accounts for about 80% of the economy, recorded no growth. Instead, the small increase was supported by a 1.2% rise in production, while construction shrank by 2.1% – its worst performance in over four years. On a monthly basis, GDP grew 0.1% in December, down from a revised 0.2% in November.
For the full year 2025, GDP growth was 1.3%, up from 1.1% in 2024 but below the Office for Budget Responsibility's forecast of 1.5%. The ONS director of economic statistics, Liz McKeown, said: 'The economy continued to grow slowly in the last three months of the year, with the growth rate unchanged from the previous quarter.'
Chancellor Rachel Reeves is expected to deliver a major speech in the coming weeks, emphasising her commitment to the government's growth plan and reviving the term 'securonomics'. Treasury sources highlighted opportunities in artificial intelligence and closer EU ties as priorities for 2026.
Economists noted that the figures reflect a slowdown ahead of the autumn Budget, as businesses delayed investment decisions amid speculation about tax rises. Ruth Gregory of Capital Economics said: 'The big picture is that private sector activity still appears to be extremely subdued.' However, recent surveys for January suggest a pickup in sentiment, with expectations of 0.4% growth in the first quarter of 2026.
