UK Business Investment Falls Less Than Expected

Business investment in the United Kingdom fell by 2.5% quarter-on-quarter in the three months to December 2025, a smaller decline than the preliminary estimate of 2.7%, but reversing from a downwardly revised 1.1% increase in the previous period. The latest figure also marked the sharpest contraction since the third quarter of 2023, pointing to a clear slowdown in corporate spending. On an annual basis, business investment rose by 2%, in line with initial estimates, though this was the weakest growth since the second quarter of 2024 and a notable slowdown from the upwardly revised 3.5% expansion in the prior period. Meanwhile, overall gross fixed capital formation edged up by just 0.2%, easing from 1.2% growth previously, largely weighed down by a steep 18.2% drop in transport equipment.

Business investment in the United Kingdom declined by 2.7% quarter-on-quarter in the three months to December 2025, compared to market expectations of a 0.4% rise and an upwardly revised 1.6% growth in the previous period, preliminary estimates showed. This was the sharpest fall since the first quarter of 2021, led by a significant drop in spending on transport equipment. On an annual basis, business investment grew by 2% in the fourth quarter, the smallest increase in a year, following a downwardly revised 2.5% rise in the third quarter. For 2025 as a whole, business investment was 3.5% higher than in 2024. Meanwhile, overall gross fixed capital formation edged down by 0.1% quarter-on-quarter but increased by 3.6% year-on-year.

Business investment in the United Kingdom rose by 1.5% quarter-on-quarter in the three months to September 2025, defying preliminary estimates of a 0.3% decline and rebounding from an upwardly revised 1.7% fall in the previous period. The increase reflected a notable improvement in corporate spending, suggesting that businesses are becoming more confident in the economic outlook and are willing to invest in new equipment, technology, and other productive assets. On an annual basis, business investment grew by 2.7%, well above initial estimates of a 0.7% rise, though slightly slowing from an upwardly revised 3.2% gain recorded in the previous period. Meanwhile, overall gross fixed capital formation expanded by 1.3%, primarily driven by growth in other machinery and equipment, dwellings, and intellectual property products.