Following a fall of 0.1% in the three months to November, real gross domestic product (GDP) increased by 0.1% in the three months to December.
Monthly GDP grew by the same amount, slightly down from the rise of 0.2% in November – which was revised down from a rise of 0.3%.
On a monthly basis, services grew by 0.3%. Meanwhile, production and construction decreased by 0.9% and 0.5% respectively in December.
‘Lacklustre’ Q4 data
The muted growth follows the news from last month that inflation, which had previously been on a downwards trajectory, rose to 3.4% in December.
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Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, attributed the lack of GDP growth to the uncertainty surrounding potential tax changes in the late Autumn Budget.
She said: “The UK economy recorded modest growth of 0.1% in the final quarter of 2025. Growth in December was also muted at 0.1%, a slowdown compared to November’s revised 0.2% increase in output, which received a boost from the recovery in carmaker Jaguar Land Rover’s production following its autumn cyber attack.
“The lacklustre data in the final quarter of last year reflects the uncertainty that weighed on the UK economy in the run-up to the Autumn Budget. Speculation around possible tax rises was rife, prompting many businesses and households to pause spending until they had greater clarity on the government’s plans.
“Growth in December was largely driven by an uplift in the services sector, perhaps as a clearer sense of the government’s approach to business and personal taxes encouraged firms and consumers to relax their budgets in the run-up to Christmas. Worryingly, though, services showed no growth across the final quarter of 2025, while production grew 1.2% and construction recorded its worst performance in more than four years.”
