GDP grew by just 0.1% in December with experts warning that “the UK economy is stuck in a rut” and “we’re limping along with barely a pulse”.
The UK economy grew in the fourth quarter of last year, but only just by 0.1%, weaker than the expected 0.2%, according to official data published this morning.
It mirrors growth of 0.1% in the previous quarter (the third quarter). Real gross domestic product (GDP) is estimated to be 1% higher in Quarter 4 2025, compared with the same quarter a year ago.
In output terms, growth in the latest quarter was driven by an increase of 1.2% in production, while the construction sector fell by 2.1% and the services sector showed no growth.
GDP is estimated to have increased by 1.3% annually in 2025, following growth of 1.1% in 2024. Meanwhile, in December, the figures were equally uninspiring.
Monthly GDP is estimated to have grown by 0.1%, following growth of 0.2% in November 2025 and an unrevised fall of 0.1% in October 2025.
Services grew by 0.3%, however, production fell by 0.9% and construction fell by 0.5% in December 2025.
ONS director of economic statistics, Liz McKeown, said: “The economy continued to grow slowly in the last three months of the year, with the growth rate unchanged from the previous quarter. The often-dominant services sector showed no growth, with the main driver instead coming from manufacturing. Construction, meanwhile, registered its worst performance in more than four years.
“The rate of growth across 2025 as a whole was up slightly on the previous year, with growth seen in all main sectors. Initial estimates show GDP per head was up on the previous year despite it contracting slightly in each of the last two quarters.”
The UK economy is clinging on for life
Daniel Hobbs, CEO at Rayleigh-based New Leaf Distribution, said the data is “grim”.
He added: “The UK economy is clinging on for life, that much is clear. This latest data makes for grim reading with the services and construction sectors particularly weak. This is what happens when you tax an economy into the ground.
“On a positive note, this bleak data may well give the Bank of England even more reason to cut rates at its next meeting as the economy desperately needs a shot in the arm.”
Craig Fish, Director at London-based Lodestone Mortgages, said the UK is struggling.
He continued: “The UK economy is stuck in a rut. Quarter after quarter, we’re limping along at 0.1% growth and that’s barely a pulse. Construction down 2.1% in Q4, production falling 0.9% in December alone, these aren’t just statistics, they’re warning signs that current policy isn’t delivering.
“Annual growth of 1.3% sounds respectable until you remember the pressures still squeezing household budgets. For mortgage holders and first-time buyers, a sluggish economy means prolonged uncertainty around rates, lending appetite, and housing market confidence.
“The government needs to stop reciting the same script and start showing real results. Businesses and homeowners aren’t looking for soundbites, they’re looking for stability and a credible path to growth. Right now, neither is in sight.”
Michelle Lawson, Director at Lawson Financial, warned that we need proper growth to make a difference in the UK.
She added: “These figures aren’t really trailblazing. Construction down won’t be good news for the government with their over-ambitious and already unachievable house building targets.
“We need serious growth to get out of this eternal downhill spiral and something to be proud about. Any increases are just light minor adjustments and certainly don’t indicate any real drastic change.”
The UK stays in low gear
Rohit Kohli, Director at The Mortgage Stop, said the UK is staying in “low gear”.
He continued: “Another quarter where Labour’s growth agenda seems to have missed its train. The economy is moving, but only just, and the gap between speeches and street-level reality is still obvious. Households feel little uplift, and firms see scant reason to commit fresh capital when demand looks this tentative.
“Productivity progress is patchy and policy noise hasn’t turned into momentum. We need fewer slogans and faster delivery on planning reform, skills, and public investment that actually lands. Until then, the UK stays in low gear – steady enough to avoid drama, too weak to change the mood.”
Samuel Mather-Holgate, Managing Director & IFA at Mather and Murray Financial, said it’s “crisis time”.
He added: “We weren’t expecting much, and we were disappointed. With only half the dismal growth that was going to be announced actually materialising it’s now crisis time, not just for Starmer, but Reeves as well.
“The construction sector is the life blood of the economy and it showed sharp decline in Q3, this should be a worry for UK plc. It’s time for new ideas, and maybe a fresh set of neighbours in number 10 and 11 will deliver that.”
The UK economy is stuck in a rut
Colette Mason, Author & AI Consultant at London-based Clever Clogs AI, said the dial is still not seeing the effect of AI.
She continued: “We keep hearing AI will supercharge the economy, yet the sector most likely to be using it quickly and easily, professional, scientific and technical services, was the single biggest drag on growth, falling 1.1%. Businesses are buying AI tools, burning hours learning them, and still not seeing it in the numbers.
“The productivity miracle is stuck in the weeks. Until companies stop treating AI as a ‘keep up at the back’ shopping spree and start treating it as a key to unlocking innovation, deeper research and productivity increases, we’ll keep getting these limp GDP figures while boardrooms and ministers insist the glorious transformation is just around the corner.”
Ben Perks, Managing Director at Stourbridge-based Orchard Financial Advisers, said he is expecting the Bank of England to now cut its base rate again.
He added: “0.1% shows that all the government are doing is papering over the cracks. The economy is pretty stagnant and unless there’s an overhaul in policy to kick start things, it’ll stay this way.
“For struggling borrowers, such low growth could be positive. This is a tick on Mr Bailey’s ‘Base Rate Cut Checklist’.”
Barely a pulse
Philly Ponniah, Chartered Wealth Manager and Financial Coach at Philly Financial, said the dial is not moving.
She continued: “Growth of 0.1% is not a recovery, it is the economy treading water. Two quarters at 0.1% tells us momentum is weak and fragile, not building. The detail matters. Services, which power the UK economy, showed no growth at all, while construction is shrinking sharply.
“A 1.2% bounce in production is welcome but it is not broad enough to drive sustained expansion on its own. This is patchy growth, not a confident upswing. For households and businesses, it means more of the same. Cautious hiring, tight budgets and limited room for error. Annual growth of 1.3% sounds steady, but when quarterly growth barely moves, it signals an economy struggling to generate real pace.”
Photo by Joshua Chehov on Unsplash.
