Katie Williams
Live reporter

The UK economy grew by 0.1% in the final quarter of 2025, and the year ended with "subdued growth", according to the Office of National Statistics. Here's a recap of this morning's news:

What the stats say: We've had a few data points this morning. The economy grew by 0.1% in the final quarter of last year, 0.1% in the month of December, and 1.3% in 2025. The annual figure of 1.3% growth overall in 2025 is higher than the 1.1% recorded in 2024.

Liz McKeown, the ONS director of economic statistics, says strong performance from the manufacturing sector was a major driver of growth in the final quarter, while the construction industry showed “continued weakness” and services flatlined for the first time in two years.

How it's been received: Prime Minister Keir Starmer says "our economy is growing" but acknowledges "there's more to do" to ease the cost of living pressure. But Tory leader Kemi Badenoch says today's figures show "our country is stuck in the slow lane."

Business groups have called for more government action to help ease costs, with British Chambers of Commerce head of research David Bharier saying the UK faces a “persistent low growth trap”.

However, economist and cross-bench peer Jim O'Neill tells the BBC the annual figure is "quite a bit higher" than people expected at the start of the year.

What to expect: Some challenges lie ahead, as businesses contend with "nervy customers", says our deputy economics editor Dharshini David. Convincing consumers and businesses that they should shake off the winter blues will be critical to the government's growth mission, she says.

We're ending our live coverage now, but you can read more on this story in our news piece.

Rachel Reeves says UK has fastest growing G7 economy in Europe. Is she right?published at 09:23 GMT

09:23 GMT

By Anthony Reuben

Earlier UK Chancellor Rachel Reeves responded to today's GDP figures by saying: “Ours is the fastest growing G7 economy in Europe.”

The G7 is a group of advanced economies that includes four from Europe - the UK, France, Germany and Italy - as well as the US, Canada and Japan.

You would normally compare growth over either a single quarter or a whole year. Reeves is right about the whole of 2025 but not about the most recent quarter.

This morning’s figures suggest, external the UK grew 0.1% between October and December - referred to as Q4 - and 1.3% in the whole of 2025.

The French economy grew more in Q4 - by 0.2% - but less in the whole of 2025, only 0.9%.

The same is true for Germany, which grew 0.3% in Q4 but only 0.4% in the whole year.

And in Italy, the economy grew 0.3% in Q4 and 0.7% in all of 2025.

Image source, Reuters

Prime Minister Keir Starmer says today's GDP figures show "our economy is growing" but acknowledges "there's more to do" to ease the cost of living pressure.

On social media platform X, he says the figures will mean "more money back in your pocket" for many people.

But Conservative leader Kemi Badenoch says the stats show "our country is stuck in the slow lane."

"Cut spending, cut tax and back business," she writes in a social media post.

In the lead-up to the latest figures we spoke to business owners about how they're feeling in this economic environment.

Nigel Day runs a heat pump installation business in Ipswich. It’s a growing industry, but he says he’s had to make difficult decisions to keep the company going.

"Increases to the minimum wage have meant that we’ve not been able to employ the youngsters into the business - they’re too expensive to have just as an extra pair of hands. And we have had to refrain from taking any apprentices," he says.

Nigel says uncertainty around the long-trailed Budget in November also meant his customers became more wary about spending.

Jasmin Aspinall runs Cub, a café and children’s play area in Ipswich. Cub used to be a toy store, but with sales falling Jasmin’s team tried a new approach - switching from retail to hospitality.

Jasmin says 2025 started out as a challenging year, before the decision was made to change the business’s approach in line with people’s changing spending habits.

"I think that’s where you change your perspective and you change your priorities. It was definitely a big risk. I think you just have to dive in with both feet," she says.

The growth figures announced today came in slightly under analysts' expectations.

But the economy did grow over the course of last year, even when inflation is taken into account. That means there is a bigger pie to share around.

Of course, whether we feel better off depends on how big a slice of that growth each of us gets. And that depends on the size of the population: a bigger population means there is less extra per person to go around. A smaller population means we each get a bigger share.

Over the course of last year GDP per head grew by 1%, boosted by the stronger growth in the first quarter of the year. But if you only focus in on the last half of the year GDP per head fell.

Image source, Office for National Statistics

Lucy Hooker
Business reporter

We've heard from economist and former Treasury minister Lord O'Neill, who says there are signs that January growth may prove stronger than expected.

Other analysts are saying the latest figures bolster their prediction for slower growth of 1% in 2026.

Ruth Gregory at Capital Economics says most of the strength in the final quarter was due to government spending, adding business investment "slumped".

Yael Selfin at KPMG is also forecasting 1% growth for the year, though pointing out that would be a slight pick-up from the current growth trend.

Lindsay James at Quilter says a weak Christmas meant the economy "barely kept its head above water".

She describes the picture as "rather bleak" but says she holds out hope that inflation could keep falling, opening the way for further interest rate cuts.

Image source, Getty Images

We've just heard from economist Lord O’Neill, a cross-bench peer and former Treasury minister under the Conservatives, who says in some ways today’s Q4 growth figures are "not that important".

Speaking to BBC Radio 4’s Today programme, he says we have already had some data for January, including for retail sales, which has been "surprisingly stronger than people expected".

He also says the 2025 annual GDP figure of 1.3% is "quite a bit higher than consensus expectations at the start".

"Of course it is nowhere near strong enough or good enough to be impacting normal people," he says. "But it’s actually better."

Importantly, he adds, "the underlying productivity of the economy is showing tentative signs of finally starting to improve".

Asked if the glass is half full or half empty, he says: "It’s more half full than it’s been for some time."

We've heard from Chancellor Rachel Reeves and her Tory counterpart Mel Stride.

The Liberal Democrats have also responded to this morning's figures, accusing the government of having "killed off" an economic recovery with "two anti-growth Budgets".

“Our plans for a new Department for Growth would give government a laser-like mission to get Britain growing again and end the cost of living crisis," says the party's deputy leader Daisy Cooper.

Image source, PA Media

Theo Leggett
Business correspondent

The UK economy grew by 0.1% in the three months to the end of December, according to preliminary estimates from the Office for National Statistics.

That was the same figure as in the previous quarter, but lower than some analysts had expected.

There was no growth in the important services sector overall, the first time this has happened in two years, although travel agencies, tour operators and administrative support services did perform strongly.

Professional, scientific and technical activities, however, declined by 1.1%.

There was growth in manufacturing, but construction registered its worst performance in four years, with output falling by 2.1%.

Across 2025, the economy grew by 1.3%, according to the ONS. Liz McKeown, the ONS director of economic statistics, said the overall picture for 2025 had been one of subdued growth.

There are always ups and downs in the monthly figures, but take a step back to look at quarterly growth as shown in this chart and the picture is clearer.

Growth has been lacklustre over the past 18 months, except for a stronger performance in the first quarter of 2025.

Image source, PA Media

We've also now heard from shadow chancellor Mel Stride, who says this morning's GDP figures show "Labour’s choices have weakened our economy".

He adds that GDP per head - another measure of economic growth - "has actually fallen" for the second quarter in a row.

"These disappointing statistics show a Downing Street and a Treasury that have taken their eye off the ball," he says on social media platform X, accusing the government of being "distracted by scandals of their own making".

"Only the Conservatives have the leader with a backbone, a plan and the team to deliver a stronger economy and get Britain working again."

For context: The ONS figures show GDP per head fell by 0.1% in both the third and fourth quarters, but grew by 1% over 2025 as a whole.

Image source, Reuters

In response to this morning's GDP figures, Chancellor Rachel Reeves says Labour has the right plan to build the UK economy.

“Thanks to the choices we have made, we’ve seen six interest rate cuts since the election, inflation falling faster than predicted and ours is the fastest growing G7 economy in Europe," she says.

Germany, France and Italy are the other European nations in the G7, which also includes Japan, Canada and the US.

“The government has the right economic plan to build a stronger and more secure economy, cutting the cost of living, cutting the national debt and creating the conditions for growth and investment in every part of the country.”

As a reminder: The UK economy grew by 0.1% in the final quarter of 2025, and by 1.3% annually, according to ONS figures published this morning.

Labour's mission is to boost growth, but the UK lost momentum in 2025published at 07:41 GMT

07:41 GMT

Dharshini David
Deputy economics editor

The government’s number one mission may be boosting growth but 2025 will go down as one where we made only modest progress, losing momentum over the year.

While the chancellor likes to say the world has changed, some issues appear home grown.

Many of the businesses I’ve spoken to, particularly in the labour-dependent services sector, point to the impact of government policies - from National Insurance and minimum wage increases to business rates - in pushing up costs and denting hiring. All while they’ve contended with nervy customers, hesitant to spend as they feared tax rises and job uncertainty.

As it stands, the likes of the Bank of England have lowered their growth expectations for 2026, and much of what remains is driven by public spending.

So, how to boost those near-term prospects, make us feeling better off?

Critical will be convincing consumers and businesses that they should shake off the winter blues, feel more confident about spending.

More now from the ONS's Liz McKeown, who says a strong performance by the manufacturing sector, which grew 0.9%, was a major driver of growth last quarter.

Meanwhile, the construction industry showed "continued weakness", with its largest fall in more than four years, dropping by 2.1%.

Every fortnight, 10,000 businesses provide the ONS with their latest insights, McKeown says.

"They're still citing economic uncertainty as the greatest challenge affecting turnover," she tells the BBC.

But there are "early signs of slightly more positive expectations coming through" from those surveys, she says.

We have just heard from Liz McKeown, director of economic statistics at the ONS. She tells BBC Radio 4's Today programme that the picture for the economy towards the end of last year is one of "subdued growth", based on the latest figures.

Looking at the year as a whole, the rate of growth in 2025 was 1.3%, which is higher than 2024.

There was also growth across "all main sectors", McKeown says, with the services sector the largest contributor to growth on an annual basis.

But, if we zoom back in on the latest quarter, McKeown says it is "notable" that there was no growth in the services sector in Q4 - an area of the economy which is "so often a driver of growth".

She says it is the "first time we haven't seen quarterly growth in services in two years".

As for annual growth, GDP is estimated to have increased by 1.3% in 2025, following growth of 1.1% in 2024.

Liz McKeown, director of economic statistics at the ONS, says the rate of economic growth across 2025 as a whole was up slightly on the previous year, "with growth seen in all main sectors".

"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," she says.

The ONS provides this breakdown:

• Services were flat 0% growth
• Production rose 1.2%
• Construction was down 2.1%

We'll have more from McKeown when she speaks to BBC Radio 4's Today programme shortly.

As well as the quarterly figure, the ONS also published December's monthly GDP figure this morning.

This shows the economy also grew by 0.1% on a monthly basis.

But the figure for the previous month of November was revised down from 0.3% to 0.2%.

The economy grew by 0.1% in the final quarter of last year, ONS figures show.

We've just heard from Kathleen Brooks, research director at the trading platform XTB, ahead of this morning's ONS release.

She tells BBC News that she expects 2025 to have ended on "quite a soft note", adding that "a lot of businesses are really feeling the pinch at the moment".

That said, there are a couple of "bright spots", she says, adding that tourism is meant to have ended the year "on a high", while the recovery at Jaguar Land Rover in November following an earlier cyber attack is expected to have delivered a "boost to manufacturing".

Despite some "little green shoots", she says she is not expecting a strong end to the year overall.

While there has been a "bit of a bounce" in consumer and manufacturing activity since the Budget, according to Brooks, she says the private sector remains "very, very weak".

Lucy Hooker
Business reporter

At the same time as receiving the latest quarterly figures for economic growth, we will also be getting the data for month of December.

You might think the festive season would be guaranteed to boost growth - all that extra shopping, partying and huge grocery bills.

Remember though that a lot of people take time off in December. Some workplaces shut down entirely for a week. And there's winter flu and bad weather - which interrupts play, especially construction but even the normal commute. All that puts a dampener on economic activity.

But as the ONS will also do the sums on growth over the final three months, or "quarter" of 2025, that will give a better picture of the strength of UK growth.

Image source, EPA