Introduction: UK GDP report coming up
Good morning. We’re about to get a report card on the Labour government’s first calendar year in power.
Growth data for the British economy in December, and for the fourth quarter of 2025, will be released at 7am UK time
They’re expected to show modest growth in the October-December period – with economists forecasting an expansion of around 0.2% in a quarter dominated by Rachel Reeves’s November budget.
That would be a pick-up on the 0.1% growth reported in July-September.
In Deember alone, GDP is expected to have risen by 0.1%, slowing after the 0.3% gowth in November (when carmaker JLR’s recovery from its cyber attack lifted output).
And this may lift the UK’s annual growth rate to 1.2% for 2025 as a whole, a Reuters poll found – that’s still weak by historic standards but slightly better than 2024’s 1.1% growth.
Grant Slade, economist at investment research firm Morningstar, sets the scene:
“We can expect to see annual economic growth of about 1.5% in 2025 for the UK economy. It is like that activity rebounded in the fourth quarter as a cyber-attack at a major auto manufacturer halted operations, sharply impacting the transport equipment sector in the quarter prior.
Looking ahead, we’re more positive on the UK’s growth outlook, with the Autumn budget proving less of a headwind to near-term economic activity than we’d originally anticipated. Notwithstanding, economic growth appears set to soften sequentially in 2026, consistent with the BoE’s still restrictive policy stance and weakening labour market conditions.”
The agenda
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7am GMT: UK GDP report for December and Q4 2025
-
7am GMT: UK trade report for December
-
9am GMT: IEA oil market report
-
1.30pm GMT: US initial jobless claims report
Key events
With less than five minutes to go until the big GDP reveal, here’s Sandra Horsfield of Investec Economics on the UK’s growth performance…..
“The big picture is that the UK economy had defied the gloomy popular narrative and outperformed expectations during 2025 – our forecast equates to GDP growth of 1.4% for the full year, whereas the consensus forecast in January 2025 had been for 1.2% GDP growth.
“We project a similar story of resilience and outperformance relative to consensus for 2026, as utilities investment and, eventually, housebuilding accelerate – the latter with a little help from further falls in interest rates too.
“The consensus forecast for this year is 1%, against our own forecast of 1.3%.”
Ahead of the UK growth report, we have “tentative signs” that the housing market in England and Wales is recovering from a months-long slowdown.
The Royal Institution of Chartered Surveyors (Rics) said its members were feeling more optimistic about the year ahead than at any time since December 2024, as inquiries from new buyers, agreed sales and house prices became less negative in January.
More here.
City economists are split about what to expect at 7am.
A Reuters poll found that forecasts for growth in the final three months of 2025 range from 0% to 0.2%.
Robert Wood, chief UK economist at Pantheon Macroeconomics, said GDP growth “could tip to 0.2%” in Q4 thanks to a pick-up in the services sector, but is predicting 0.1%.
Wood explains:
“We think the broad thrust from activity in the services sub-sectors in December indicates that budget uncertainty is already fading quickly.”
Introduction: UK GDP report coming up
Good morning. We’re about to get a report card on the Labour government’s first calendar year in power.
Growth data for the British economy in December, and for the fourth quarter of 2025, will be released at 7am UK time
They’re expected to show modest growth in the October-December period – with economists forecasting an expansion of around 0.2% in a quarter dominated by Rachel Reeves’s November budget.
That would be a pick-up on the 0.1% growth reported in July-September.
In Deember alone, GDP is expected to have risen by 0.1%, slowing after the 0.3% gowth in November (when carmaker JLR’s recovery from its cyber attack lifted output).
And this may lift the UK’s annual growth rate to 1.2% for 2025 as a whole, a Reuters poll found – that’s still weak by historic standards but slightly better than 2024’s 1.1% growth.
Grant Slade, economist at investment research firm Morningstar, sets the scene:
“We can expect to see annual economic growth of about 1.5% in 2025 for the UK economy. It is like that activity rebounded in the fourth quarter as a cyber-attack at a major auto manufacturer halted operations, sharply impacting the transport equipment sector in the quarter prior.
Looking ahead, we’re more positive on the UK’s growth outlook, with the Autumn budget proving less of a headwind to near-term economic activity than we’d originally anticipated. Notwithstanding, economic growth appears set to soften sequentially in 2026, consistent with the BoE’s still restrictive policy stance and weakening labour market conditions.”
The agenda
-
7am GMT: UK GDP report for December and Q4 2025
-
7am GMT: UK trade report for December
-
9am GMT: IEA oil market report
-
1.30pm GMT: US initial jobless claims report
