The UK economy expanded by just 0.1% in the final three months of 2025, according to official figures from the Office for National Statistics (ONS), as falling business investment and weak consumer spending dragged on growth. The reading matched the previous quarter's pace and fell short of the 0.2% rise expected by economists.
For the full year, GDP grew by 1.3%, an improvement on 2024's 1.1% but below the official forecast of 1.5%. The dominant services sector showed no growth, while construction shrank by 2.1% – its worst performance in four years. The production sector provided a small boost, rising by 1.2%.
Business investment dropped by 2.7% in the fourth quarter, and consumer spending edged up only 0.2%. The ONS said the economy also grew by 0.1% in December, slowing from a revised 0.2% in November. Economists attributed the weakness to uncertainty ahead of the autumn Budget, which led households and businesses to hold back spending and investment.
Chancellor Rachel Reeves is expected to deliver a major speech in the coming weeks, reaffirming her commitment to the government's growth strategy and reviving the term “securonomics”. Treasury sources said the speech will highlight opportunities in AI and closer EU ties. The data follows revelations that Health Secretary Wes Streeting told the then US ambassador that Labour had “no growth strategy at all”.
Despite the gloomy end to 2025, early surveys for January suggest a pickup in business and consumer sentiment, with economists forecasting 0.4% growth in the first quarter of 2026. The Office for Budget Responsibility had predicted annual GDP growth of 1.5% for 2025 and 1.4% for 2026, but low productivity growth continues to weigh on longer-term prospects.
