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Subdued, sluggish, and slow. Three words
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that sum up UK economic growth for 2025.
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Now, why did we miss the mark? Well,
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most experts were expecting a 0.2
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expansion in the fourth quarter, but the
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engine of the British economy, the
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services sector, completely stalled.
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While manufacturing and production
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provided a small 1.2% lift, it wasn't
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enough to offset a sharp 2.1%
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contraction in construction, marking the
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sector's worst performance in 4 years.
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This sluggishness isn't happening in a
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vacuum, though. The final quarter of 20
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25 was dominated by Rachel Reeves's
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second budget. We saw businesses hit the
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pause button on investment, spooked by
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the tax speculation, and it's clear that
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the budget bounce that many hoped for
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has failed to materialize. Though some
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economists are keeping the faith that
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the clouds of uncertainty will continue
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to lift in the new year.
