- The UK economy only managed to eke out 0.1% growth during the final quarter of 2025
- Growth for the year as a whole has been upgraded to 1.4%
- Construction sector particularly weak, despite a big push by the government to get Britain building
Danni Hewson, AJ Bell head of financial analysis, comments on revised quarterly GDP figures:
“There’s always the possibility that growth figures could be revised upwards, pointing to a more vibrant economy. But there was no such fairytale end to 2025.
“Even before the start of the conflict in the Middle East, which is set to reignite global inflation, the UK was struggling.
“Consumers were nervous as unemployment numbers edged up and though real household disposable income increased in the final months of the year, many people were still choosing to save any bit of spare cash in case of emergency. The anticipated surge in household costs in the coming months looks set to be that emergency, and one which will tax already vulnerable households severely.
“People are inflation weary after weathering one cost of living crisis. They’d been looking forward to brighter days which had been expected as inflation continued to cool and interest rates were falling. But anyone who has experienced sticker shock at the petrol pump will have an inkling of what may be headed our way.
“The IMF has warned that the UK, like Italy, is particularly exposed to another gas crisis, with the global outlook dimmed just as many economies had shown signs of recovery.
“The construction sector has been particularly weak, despite a big push by the government to get Britain building. Increased costs and potential rate hikes will only further weaken the outlook for housebuilders.
“With the war in Iran now in its fifth week, a quick economic snap back seems impossible and the potential for recession more and more likely.”
