UK Economy Sees Meager Growth in Q4

The UK economy grew a mere 0.1% in the fourth quarter, according to preliminary figures from the Office for National Statistics (ONS) released on Thursday. This falls short of economists’ expectations, who had predicted a 0.2% growth in the October-December period, following a 0.1% growth in the third quarter.

On a month-on-month basis, the economy expanded 0.1% in December, down from a 0.2% expansion, revised down from 0.3%, the previous month. The pound sterling was flat against the dollar following the data, at $1.3624. The ONS’ Director of Economic Statistics, Liz McKeown, noted that the latest data showed a mixed economic picture.

Mixed Economic Picture

“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,” McKeown said. The UK economy is estimated to have grown 1.3% in 2025, the ONS noted, following growth of 1.1% in 2024.

The growth figures come after the Bank of England voted narrowly at its early February meeting to keep interest rates on hold, at 3.75%, given persistent inflationary pressures. Those pressures are expected to ease in the coming months, however, and economists predict that the central bank could next cut rates in April to stimulate the lackluster British economy.

Expert Insights

Samuel Edwards, head of Client Portfolio Management at financial services firm Ebury, noted that the UK had ended 2025 on a positive note, “albeit a very modest one.” Scott Gardner, investment strategist at J.P. Morgan Personal Investing, commented that after a mixed bag in the final quarter, recent data hints that the UK economy is due a recovery in 2026.

“Manufacturing activity picked up in the first month of the year while the services industry has seen a decent influx of new business activity. The hope is that this progress can grease the wheels of the economy and lead to an improved outlook and performance over 2026,” Gardner said. For more information on the UK’s Q4 GDP growth, visit Here

Smart Tip for Readers

To better understand the impact of economic growth on your personal finances, consider tracking key economic indicators, such as GDP and inflation rates, to make informed decisions about your investments and budgeting. By staying informed, you can navigate economic changes with confidence and make smart financial choices.