Preliminary data by the Office for National Statistics (ONS) showed the United Kingdom recorded minimal economic growth of 0.1% in the fourth quarter of 2025. The result fell short of market expectations and reflects persistent challenges in key economic sectors.
The October–December gross domestic product growth rate was below the 0.2% predicted by economists surveyed by Reuters, but matched the 0.1% expansion seen in the prior quarter. On a monthly basis, December’s output grew by 0.1%, coming in lower than November’s 0.2%, which itself was revised down from the initially reported 0.3%.
According to the ONS, the generally dominant services sector failed to deliver growth during this period, with manufacturing output providing the primary boost to economic activity instead. Construction activity saw its steepest downturn in over four years.
Year-on-year, the economy expanded by 1.3% in 2025, following a 1.1% advance in 2024, based on ONS estimates.
The report comes after the Bank of England opted to maintain its key interest rate at 3.75% in early February, citing ongoing inflationary pressures. Market participants broadly expect a possible rate reduction as early as April, should price growth moderate further.
Commenting on recent economic indicators, Samuel Edwards of Ebury highlighted that the U.K. concluded 2025 with a marginally positive performance, though concerns over labor market weaknesses and persistent inflation remain.
Scott Gardner at J.P. Morgan Personal Investing, on the other hand, pointed to early signs of improvement for 2026, citing a rebound in manufacturing output and increased business activity within the services industry as positive developments for the year ahead.
