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The numbers are in, and for the UK
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economy, 2025 didn't exactly end with a
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bang. Fresh data from the Office for
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National Statistics reveals the economy
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expanded a mere 0.1% in the final
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quarter of the year. And it's a figure
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that's left the city underwhelmed and
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the government facing tough questions
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about its growth strategy. As one
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analyst puts it, "Subdued, sluggish, and
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slow." Three words that sum up UK
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economic growth for 2025. Now, why did
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we miss the mark? Well, most experts
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were expecting a 0.2 expansion in the
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fourth quarter. But the engine of the
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British economy, the services sector,
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completely stalled. Representing around
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80% of our GDP output, services saw zero
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growth between October and December.
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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 four
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years. This sluggishness isn't happening
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in a vacuum, though. The final quarter
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of 2025 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 amid rumors of a
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huge gap in public finances. December
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saw a tiny 0.1% uptick after the budget
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was finalized, and it's clear that the
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budget bounce many hoped for has failed
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to materialize. Though some economists
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are keeping the faith that the clouds of
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uncertainty will continue to lift in the
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new year. But here's the metric that
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really matters for your pocketbook, GDP
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per head. While the headline figure is
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positive, GDP per person actually fell
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0.1% for the second consecutive quarter.
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In a stark sign, individuals are getting
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poorer. And looking ahead to 2026, the
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Bank of England has already trimmed its
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forecast to 0.9% growth from 1.2%
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previously. So, where do we go from
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here? Well, Shadow Chancellor Mel Stride
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is calling this a failure of focus. A
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similar sentiment shown in newly
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released messages from Health Secretary
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Wes Streeting, criticizing his own
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government. The Treasury is maintaining
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its plan will eventually lower the
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national debt and create a sense of
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stability. But for the average business
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owner or homeowner, stability might be
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feeling a lot like stagnation right now.
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So, is the UK stuck in a low-growth
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trap, or is this just a post-budget
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hangover we thought we would have? Let
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me know your thoughts in the comments,
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and don't forget to like and subscribe
2:10
for more deep dives into the city's
