The UK economy grew by a mere 0.1% in the final quarter of 2025, official figures show, as falling business investment and weak consumer spending dragged on activity. The Office for National Statistics (ONS) reported that gross domestic product (GDP) expanded at the same subdued pace as the previous three months, undershooting economists' expectations of 0.2%.
Business investment dropped by 2.7% in the fourth quarter, while consumer spending rose only 0.2%. The dominant services sector posted no growth, with the small overall increase driven by a 1.2% rise in production. Construction suffered its worst performance in four years, contracting by 2.1%.
For 2025 as a whole, the economy grew by 1.3%, an improvement on 2024's 1.1% but below the government's 1.5% forecast. The weak end to the year was attributed to uncertainty ahead of the autumn Budget, with households and businesses delaying spending and investment amid speculation of tax rises.
Chancellor Rachel Reeves is expected to deliver a major speech in the coming weeks, reaffirming her commitment to the government's growth strategy, which she has termed 'securonomics'. Treasury sources indicated that priorities for 2026 will include artificial intelligence and closer EU ties.
Despite the lacklustre data, recent surveys for January suggest a pickup in business and consumer sentiment, with economists forecasting 0.4% growth in the first quarter of 2026. However, the OBR has also downgraded its 2025 forecast, expecting annual growth of 1.5% up to 2030, partly due to low productivity.
