The UK economy is expected to have recorded modest growth during the final quarter of 2025 as it navigated persistent budget uncertainty, according to leading economists.
The Office for National Statistics (ONS) will publish crucial GDP figures for December and the full fourth quarter on Thursday, offering a clearer picture of the country's economic performance.
Economists are largely predicting a 0.1 percent expansion for the quarter. However, some analysts suggest growth could be marginally higher, driven by stronger-than-expected activity in November and a sense of greater clarity following the autumn budget, which may have supported businesses in the run-up to the festive season.
This follows previous ONS data which indicated growth of 0.1 per cent in the three months to September.
The following months saw a 0.1 percent contraction in October, followed by a 0.3 percent rebound in November, largely attributed to a recovery in Jaguar Land Rover manufacturing production after a major cyberattack.
Despite this, December is expected to have seen no growth, according to estimates from Pantheon Macroeconomics.
Several industry surveys, including the month's construction PMI data, also pointed to continued weakness in the housing, commercial construction and civil engineering sectors.
Conversely, others believe that greater post-budget certainty could have spurred a modest increase in spending.
Victoria Scholar, chief investment officer at Interactive Investor, commented: “Economic activity was likely to rebound post-Budget once that cloud of uncertainty moved into the rear-view mirror in December.
“In addition, there could have been an improvement in the services sector, as consumers spent on things like food and beverage, retail and hotels during the festive season.”
Robert Wood, chief economist at Pantheon Macroeconomics in the UK, suggested GDP growth “could reach 0.2%”, but maintained his original prediction of 0.1%.
He added: “We believe the broad boost in activity in services subsectors in December indicates that budget uncertainty is already fading rapidly.”
However, the broader outlook for UK economic growth remains subdued. The Bank of England announced Thursday that it estimates the economy grew 1.4 percent last year, a slight reduction from its previous forecast of 1.5 percent.
The central bank also revised down its growth projections for 2026, from 1.2 percent to 0.9 percent, and for 2027, from 1.6 percent to 1.5 percent.
