UK economy grew by 0.1% in final quarter of 2025

The UK economy registered a modest expansion in the final three months of 2025, with Gross Domestic Product (GDP) growing by 0.1%, according to official figures released this morning.

The marginal increase confirms that the country avoided an economic contraction during the period spanning October to December, concluding the year on a slightly positive note following earlier quarters characterized by sluggish performance.

The official statistics show that the driving force behind the economic uplift was the manufacturing sector. Industrial production experienced robust growth during the period, providing the necessary momentum to offset relative stagnation observed in consumer-facing services. The rise in factory output was attributed by many analysts to strong export orders and the easing of international supply chain pressures, which bolstered industrial activity.

While the overall 0.1% growth figure is minimal, it was better than many forecasts, which had broadly predicted either flatlining activity or a slight decline as households contended with persistent inflationary pressures and high interest rates throughout the year. The positive data means the UK avoided a technical recession—defined as two consecutive quarters of negative growth—a concern that had dominated economic discussion earlier in the autumn.

Economists caution that relying heavily on the volatile manufacturing sector for sustained growth in 2026 presents risks. Further expansion will necessitate a broader recovery, particularly in the domestic services sector, which accounts for the vast majority of UK economic output. Policy experts suggest that while the resilience shown by industrial output is encouraging, ongoing consumer cautiousness linked to the cost of living will likely keep overall economic growth muted in the near term.

The data provides limited room for celebration but confirms a degree of underlying resilience within the UK’s productive capacity as it moves into the new calendar year.