UK GDP Growth Beats Expectations in February

The UK economy grew 0.1% month-on-month in December 2025, in line with market expectations and following a revised 0.2% increase in November. Services led the growth, rising 0.3% as gains in transportation and storage (+2.0%), administrative and support services (+1.4%), and food and beverage service activities (+1.6%) offset declines in sports activities and amusement and recreation (-5.9%) and human health and social work (-0.4%). Meanwhile, production output fell 0.9%, with all four production sectors declining: electricity, gas, steam and air conditioning (-1.7%), manufacturing (-0.5%), water supply, sewerage and waste management (-2.4%), and mining and quarrying (-0.7%). Construction dropped 0.5%, driven by a 2.5% fall in repair and maintenance, while new work rose 1.0% on the month. On a yearly basis, GDP grew 0.7%, the softest since Q2 2024, below the expected 1.1% and slowing from the 1.2% rise recorded in November.

The UK economy expanded by 0.3% month-on-month in November 2025, rebounding from a 0.1% contraction in October and outperforming market expectations of 0.1% growth. The services sector led the recovery, growing by 0.3% and reversing a 0.3% decline in the previous month. Professional, scientific and technical activities made a strong contribution, rising by 1.7%, followed by information and communication (+1.5%) due to gains in computer programming, consultancy and related activities, and wholesale and retail trade (+0.6%). Production output increased by 1.1%, following a 1.3% rise in October, reflecting a 2.1% expansion in manufacturing. This was largely driven by a 10.7% surge in transport equipment manufacturing, with output of motor vehicles, trailers and semi-trailers jumping 25.5%, as car production continued to normalize after August’s cyber incident. In contrast, construction activity declined by 1.3%, slightly deeper than the 1.2% fall recorded in October.

The British economy unexpectedly contracted 0.1% mom in October 2025, following a similar decline in September and falling short of expectations for a 0.1% expansion. This marks the fourth consecutive month without economic growth. Services sector declined 0.3%, after a 0.2% gain in September, with the largest negative contributions coming from wholesale and retail trade and repair of motor vehicles and motorcycles (-4.3%) and computer programming, consultancy and related activities (-3.6%). Construction was also down by 0.6% (vs a 0.2% rise in September), with the main negative contribution coming from private new housing (-2.4%). On the other hand, the production sector increased 1.1%, rebounding from a 2% plunge, with growth seen in manufacturing (0.5%), mostly manufacture of motor vehicles and trailers (9.5%); mining (4.3%); electricity, gas, steam and air conditioning (2.1%); and water; sewerage, waste (1.5%). Meanwhile, the GDP also contracted 0.1% in the three months to October.