The UK economy expanded by just 0.1% in the final quarter of 2025, according to figures from the Office for National Statistics, missing expectations of 0.2% growth. The weak performance was driven by a fall in business investment and subdued consumer spending, leaving little momentum entering 2026.
Business investment declined by 2.7% in the quarter, while consumer spending grew by only 0.2%. The services sector, which accounts for about 80% of the economy, stagnated. A 1.2% rise in production provided the sole boost, while construction shrank by 2.1%, its worst performance in four years.
Annual GDP growth for 2025 was 1.3%, an improvement on 1.1% in 2024 but below the Office for Budget Responsibility's forecast of 1.5%. The figures come as Chancellor Rachel Reeves prepares to deliver a speech in the coming weeks, reiterating her growth strategy and reviving the term 'securonomics'.
Economists attribute the sluggish end to the year to uncertainty surrounding the autumn Budget, which led households to hold back spending and companies to delay investment. However, recent surveys suggest sentiment has picked up in early 2026, with expectations of 0.4% growth in the first quarter.
