"Gross domestic product (GDP) growth was 1.3% in 2025, driven by investment and government consumption. Private consumption growth was weak last year, while net trade weighed on growth. Growth in the fourth quarter of last year was driven by the production sector, which saw strong outturns earlier in the quarter. Services showed no growth while construction saw the largest quarterly contraction since mid-2021."
"The fourth quarter only just scraped together a positive growth figure, with services disappointingly showing no growth. That said, surveys point toward a recovery in business sentiment in the New Year after months of damaging speculation in the run up to the Autumn Budget. With the Spring Statement upcoming in March, the Chancellor should look to support this change in sentiment by avoiding a repeat of last year and refrain from further policy changes."
GDP grew 1.3% in 2025, supported by investment and government consumption. Private consumption was weak and net trade weighed on overall growth. The fourth quarter’s positive outturn was driven by production after strong early-quarter performance, while services showed no growth and construction experienced the largest quarterly contraction since mid-2021. Survey evidence indicates business activity picked up at the start of 2026. NIESR expects 0.3% GDP growth in the first quarter of 2026 with services leading growth. Surveys point to a recovery in business sentiment after months of damaging speculation ahead of the Autumn Budget, and the Chancellor should avoid further policy changes ahead of the Spring Statement to support sentiment.
Read at London Business News | Londonlovesbusiness.com
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