A british economy grew very little in the last quarter of 2025, with economic activity performing worse than initially estimated during the preparation of Finance Minister Rachel Reeves’ budget, according to official data released this Thursday (12).
O Gross Domestic Product grew 0.1% in the period from October to December, the same slow pace as in the third quarter, reported the Office for National Statistics.
Economists consulted by Reuters, as well as the Bank of England, forecast an expansion of 0,2% in the fourth quarter compared to the previous three months.
The period was marked by rampant speculation about tax increases before the Reeves budget on 26 November. Some more recent data suggested that uncertainty has eased for consumers and businesses.
“Looking at various surveys, there have been some preliminary signs that sentiment has changed and started to improve following last year’s budget, which could help boost activity this year,” said Luke Bartholomew, deputy chief economist at Aberdeen.
“However, recent political uncertainty may reverse this improvement in sentiment.”
Prime Minister Keir Starmer has had to fight to maintain his grip on Downing Street this week due to the .
The numbers released this Thursday reinforced the reason why investors believe that it is more likely that the Bank of England will reduce interest rates again in March.
Monthly GDP data showed a sharp downward revision to growth.
The data suggested hesitation on the part of companies during the fourth quarter as their investments fell by almost 3% — the biggest quarterly drop since the beginning of 2021, driven largely by volatility in transportation investments.
Economist Thomas Pugh of tax and consultancy firm RSM said the overall weakness in business investment suggests budget uncertainty has put the brakes on investment and spending.
The manufacturing industry provided the biggest boost to activity, despite the fact that car production was still recovering from the September cyberattack on Jaguar Land Rover, while the services sector remained stable. Construction production contracted 2,1%.
In 2025 as a whole, the British economy grew by annual average of 1.3%according to the National Statistics Office, compared to 0.9% in France, 0.7% in Italy and 0.4% in Germany.
