UK Economic Growth Stalls at 0.1% as 2025 Slowdown Persists
- Market News
January 29, 2026 2:31 pm
Official figures show that the UK economy expanded by only 0.1% in the third quarter of 2025. This follows downward revisions to earlier GDP estimates, reinforcing the picture of a sluggish economy. The data confirms that growth momentum weakened through the second half of the year. Output remained broadly flat across several major sectors. The figures were published by the Office for National Statistics and widely cited in financial markets. They provide a clear snapshot of economic conditions heading into the final quarter.
Quarterly growth of 0.1% represents one of the weakest performances recorded in recent periods outside of recessionary phases. Services activity delivered limited support, while other areas failed to provide meaningful momentum. The lack of broad-based expansion suggests the economy struggled to generate sustained demand. Business investment showed little improvement during the period. Household spending remained subdued compared with earlier stages of the recovery. Overall, the data reflects an economy moving sideways rather than accelerating.
Revisions to earlier GDP data also contributed to the cautious outlook. Previous quarters were adjusted slightly lower, indicating growth was weaker than initially reported. Such revisions often influence market confidence and economic forecasting. They also affect how policymakers and investors assess underlying trends. By late 2025, the revised figures painted a consistent picture of modest expansion. The result was a confirmation rather than a surprise for most market participants.
The minimal growth recorded in Q3 highlights the absence of strong economic drivers. Output gains were limited and uneven across sectors. Manufacturing activity remained constrained, while services growth was not strong enough to compensate. Construction output also failed to deliver significant support. Together, these components explain the muted headline figure. The overall data shows an economy struggling to gain traction.
GDP growth of 0.1% suggests that underlying demand remained weak. Consumer activity did not provide a meaningful boost during the quarter. Business output remained cautious, reflecting ongoing uncertainty in operating conditions. Export growth also failed to materially lift overall performance. These factors combined to limit quarterly expansion. The result was an economy that avoided contraction but did not show meaningful improvement.
Such low growth levels often heighten sensitivity to future data releases. Small changes in output can have an outsized effect on sentiment. Markets tend to watch subsequent releases closely when growth hovers near zero. The Q3 data therefore became an important reference point. It shaped expectations for how the economy might perform into year-end. The figures set a low baseline for evaluating subsequent developments.
Financial markets responded cautiously to the confirmation of weak economic growth. Equity markets showed limited reaction, reflecting that the figures were largely anticipated. Currency markets also adjusted modestly following the release. Investors had already priced in a subdued growth environment. As a result, the data reinforced existing expectations rather than altering them. The response was measured rather than dramatic.
Bond markets closely monitored the GDP release for signals about economic resilience. Weak growth figures often influence expectations around interest rates and borrowing conditions. However, the minimal expansion did not trigger sharp market moves. Instead, it confirmed the slow-growth narrative already in place. Market participants focused on whether future data would show improvement or further stagnation. The Q3 figures served as confirmation rather than a turning point.
As the year moved toward its close, the GDP data remained a central reference for analysts. It highlighted the challenges facing the UK economy entering the final quarter of 2025. Growth remained present but fragile. The figures underscored the lack of momentum across multiple sectors. For investors and businesses, the message was one of caution rather than collapse. The economy continued to move forward, but only just.
