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The UK economy expanded by only 0.1% in the final three months of last year, according to official data, as falling business investment and weak consumer spending led to little momentum going into 2026.
Figures from the Office for National Statistics (ONS) show that the economy grew at the same rate of 0.1% as the previous three months. This was less than a 0.2% rise that economists had been expecting.
The economy grew by 1.3% in 2025, an improvement on growth of 1.1% in 2024, although worse than official forecasts of 1.5%. The ONS said the economy also expanded by 0.1% on a monthly basis in December, slowing from 0.2% in November – a figure that was revised down from 0.3%.
The downbeat data came as Rachel Reeves prepares to use a major speech in the coming weeks to insist she will stick to her growth plan, reviving the term “securonomics” to describe the approach.
After a deliberately low-key House of Commons statement to mark the spring forecast on 3 March, the chancellor plans to deliver a public lecture, reiterating her strategy and setting out priorities for 2026.
Treasury sources said these will include the opportunities the government sees in AI – with an aide calling her an “optimist” about the technology – and hopes for closer EU ties.
It follows the revelation that health secretary Wes Streeting told then US ambassador Peter Mandelson that Labour had “no growth strategy at all”.
The rise came despite there being no growth at all in the dominant services sector, which makes up about 80% of the economy. The small boost was instead driven by the production sector, up by 1.2%, while the construction industry shrank 2.1%, its worst performance in four years, the ONS said.
Liz McKeown, the director of economic statistics at the ONS, 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.”
Business investment fell by 2.7% in the final quarter, while consumer spending grew by a sluggish 0.2%.
The figures back up earlier consumer and business surveys that suggested economic activity had slowed in the run-up to the late November budget, as households held off spending and companies delayed investment decisions amid speculation that the chancellor would implement significant tax rises.
“The big picture is that private sector activity still appears to be extremely subdued,” said Ruth Gregory, the deputy chief UK economist at Capital Economics.
The UK economy fared relatively well in the first half of 2025, with growth of 0.7% in the first quarter and 0.3% in the second quarter.