The UK economy is expected to have recorded modest growth in the final quarter of 2025, as uncertainty surrounding the autumn Budget begins to dissipate, according to economists. The Office for National Statistics (ONS) is set to release GDP figures for December and the fourth quarter on Thursday, providing a clearer picture of economic performance.
Economists largely predict a 0.1 per cent expansion for the quarter, though some suggest growth could be marginally higher. This follows a 0.1 per cent contraction in October and a 0.3 per cent rebound in November, driven by a recovery in manufacturing output at Jaguar Land Rover after a cyberattack. December is projected to have seen no growth, according to Pantheon Macroeconomics, with industry surveys pointing to continued weakness in construction.
However, Victoria Scholar, head of investment at Interactive Investor, noted that improved certainty post-Budget may have stimulated spending. "It is likely that economic activity picked up after the budget once that cloud of uncertainty shifted to the rear view mirror in December," she said. Robert Wood, chief UK economist at Pantheon Macroeconomics, suggested GDP growth "could tip to 0.2%" but maintained his original prediction of 0.1 per cent, adding that "budget uncertainty is already fading quickly."
The broader outlook remains subdued. The Bank of England estimated the economy grew by 1.4 per cent last year, down from a previous forecast of 1.5 per cent. It also revised down growth projections for 2026 to 0.9 per cent and for 2027 to 1.5 per cent.
