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The ONS released its final‑quarter 2025 picture on a gray November morning, and the headline was almost invisible: GDP grew a razor‑thin 0.1 per cent.
That whisper of growth masked a deeper story. In the three months to November, activity turned negative, a reversal that coincided with the run‑up to Chancellor Rachel Reeves’ fiscal showcase on 26 November.

Construction, the sector that usually signals confidence, posted its worst performance since 2021, sliding 2.1 per cent in the quarter. The backbone of the British economy, services, flat‑lined entirely, delivering zero growth for the first time in years.
Only a modest rise in immigration kept total GDP from slipping further. On a per‑head basis the economy actually shrank 0.1 per cent in the same period, echoing an identical dip in the previous quarter.
When the numbers are annualised, the picture brightens just enough to claim a 1.3 per cent increase for the whole of 2025 – a step up from 1.1 per cent in 2024 and the strongest pace since 2022. Yet even this modest gain fell short of the Bank of England’s 1.4 per cent target and the consensus forecast of most economists.
For many, the statistics confirm a six‑month stretch of dwindling real wages and mounting pressure on household budgets. Yet Prime Minister Keir Starmer, fighting to keep his grip on No 10, insisted the opposite.
“Job number one is easing the cost of living pressure that many people still feel,” Starmer said, his tone steady. “Today’s GDP figures show our economy is growing. That means more money back in your pocket.”
Reeves, for her part, highlighted a different metric: GDP per head, which rose 1 per cent over the first half of 2025 after a complete standstill in 2024. “Thanks to the choices we have made, we’ve seen six interest‑rate cuts since the election, inflation falling faster than predicted, and ours is the fastest‑growing G7 economy in Europe,” she declared.
She added, “The Government has the right economic plan to build a stronger and more secure economy, cutting the cost of living, cutting the national debt and creating the conditions for growth and investment in every part of the country.”
The timeline of the quarter was anything but smooth. October saw output dip 0.1 per cent, only to be nudged up 0.2 per cent in November after a modest revival at Jaguar Land Rover, whose production rebounded following a major cyber‑attack that had stalled the plant for weeks.
All the while, whispers of Budget uncertainty swirled. Rumours that sweeping tax cuts might be off the table seemed to hold back private investment just as the fiscal event loomed.
Liz McKeown, the ONS director of economic statistics, summed up the mood: “The economy continued to grow slowly in the last three months of the year, with the growth rate unchanged from the previous quarter. The often‑dominant services sector showed no growth, with the main driver instead coming from manufacturing. Construction, meanwhile, registered its worst performance in more than four years.”
She noted a silver lining: “The rate of growth across 2025 as a whole was up slightly on the previous year, with growth seen in all main sectors. Initial estimates show GDP per head was up on the previous year despite it contracting slightly in each of the last two quarters.”
During a routine visit to a BT site, reporters pressed Reeves on Health Secretary Wes Streeting’s criticism of Lord Mandelson, who had accused Labour of having “no growth strategy at all.” Reeves answered briskly, “He was really clear yesterday that one of the things he got wrong in his messages was that the economy has grown this year. We have had six cuts in interest rates, and as Wes said yesterday, that is down to my economic plan, this government’s economic plan.”
The ONS data also broke down the contributors to the quarter’s growth. Eight of fourteen services subsectors posted positive figures, while seven of thirteen manufacturing subsectors added to the expansion. Nominal GDP was primarily driven by a rise in employee pay, a modest but tangible lift for households.
Conversely, the dominant services sector recorded zero growth, production climbed 1.2 per cent, and construction fell 2.1 per cent – its steepest drop in over four years.
Scott Gardner, an investment strategist at JP Morgan Personal Investing, painted a stark picture: “The UK economy ended 2025 firmly in the slow lane, undershooting expectations and remaining in a low gear in the final quarter of the year as businesses and consumers digested the Chancellor’s November budget.” He added, “This marks a clear reversal in fortunes for the economy after strong growth shown in the first half of the year failed to carry over into the rest of 2025.”
The Bank of England, too, had been revising its outlook. It recently lowered its estimate of last year’s growth from 1.5 per cent to 1.4 per cent, and trimmed its 2026 forecast from 1.2 per cent to 0.9 per cent, while nudging 2027 down from 1.6 per cent to 1.5 per cent.
All these signals converge on a single reality: Britain’s economy is inching forward, but the momentum is fragile, the confidence shaken, and the political narrative fiercely contested.
As the new year dawns, households brace for another round of price pressures, while policymakers scramble to translate a 0.1 per cent quarterly rise into a story of real‑world improvement. Whether the “money back in your pocket” rhetoric will translate into tangible relief remains the question every Briton now asks themselves.




