UK Economic Slowdown Confirmed by New Official Figures in Q3 2025
The UK economy showed signs of slowing down in the third quarter of 2025, with GDP growth falling to 0.1% from 0.2% in the previous quarter, which itself was revised down from 0.3%.
The ongoing slowdown was highlighted by the Office for National Statistics (ONS), with director of economic statistics Liz McKeown confirming updated figures that reflect this trend.
Manufacturing was notably affected by a cyberattack on Jaguar Land Rover that disrupted production for weeks, causing a decline in this sector, although services continued to grow.
Household finances also deteriorated during this period, with the saving ratio dropping by 0.7 percentage points to 9.5%, marking its lowest point in a year, and disposable income per head falling by 0.8%.
In response to the economic conditions, the Bank of England cut interest rates to 3.75% last week and expects zero GDP growth in the fourth quarter of 2025, with an underlying growth rate around 0.2% per quarter.
Year-on-year, GDP in Q3 2025 was 1.3% higher than the same quarter in the previous year, and full-year GDP for 2024 rose by 1.1%. The ONS also revised 2024 Q4 GDP up by 0.1 percentage points to 0.3%.
Earlier in 2025, the UK experienced some of the strongest growth among G7 economies alongside Japan in the first half of the year, but growth slowed significantly thereafter.
Critics have pointed to uncertainty over tax policies ahead of the chancellor’s budget as one possible factor contributing to the deceleration in economic growth.
