FX.co ★ UK Annual Growth Slows to 1.0% in Q4

The UK economy grew by 1.0% year-on-year in the fourth quarter of 2025, down from 1.2% in the previous quarter and just below market expectations of 1.2%, according to preliminary estimates. This was the weakest annual growth rate since the second quarter of 2024. The softer outcome capped a difficult year for the economy, which faced substantial tax increases, trade tensions stemming from US President Donald Trump’s policies, and a major cyberattack on the country’s largest car manufacturer. Business and consumer confidence also remained muted toward the end of the year, ahead of Chancellor of the Exchequer Rachel Reeves’ budget on November 26. In the fourth quarter, both the services and production sectors expanded by 1.0%, while construction registered a modest 0.2% rise. For 2025 overall, the economy grew by 1.3%, slightly above the 1.1% increase recorded in 2024.