FX.co ★ UK GDP Growth Disappoints in Q3

In the third quarter of 2025, the UK economy experienced a modest growth rate of 0.1%, down from a 0.3% increase in the previous quarter and not meeting market expectations set at 0.2%, according to initial estimates. Fixed investment saw a robust rise of 1.8% compared to just 0.5% in the second quarter, propelled by elevated expenditures on ICT equipment, machinery, residential properties, and intellectual property products, despite a 0.3% decline in business investment. Meanwhile, household consumption recorded a 0.2% growth, an improvement from 0.1% in Q2, fuelled by increased spending on clothing, footwear, recreation, and culture. Government spending also rose by 0.3%, although this was a slowdown from a 1.3% increase in the prior quarter, with gains primarily in education and social care sectors. The net trade segment supported the economy as imports declined more sharply than exports, partly balancing out the significant negative impact from a pronounced reduction in inventories compared with Q2. In terms of output, services expanded by 0.2% and construction saw a slight increase of 0.1%, while the production sector contracted by 0.5%. On a year-over-year basis, the GDP grew by 1.3%, just shy of the anticipated 1.4% forecast.