16 October 2025
If you are covering the latest UK GDP figures from the Office for National Statistics, please find below a comment from Lindsay James, investment strategist at Quilter:
“In the week that the International Monetary Fund gave the UK’s economic growth forecasts a small bump up, today’s GDP figures paint a picture of an economy stumbling to the end of the year after a strong start. Monthly GDP grew just 0.1%, giving a three-month rate of 0.3% - not exactly exciting figures. Markets will have been hoping for signs that the UK can maintain it’s early-year momentum but it appears that has now dissipated just as we approach a crunch Budget statement from the Chancellor. Rachel Reeves will need to find a tonic and quickly if she is to extricate the economy from its current malaise.
“There are a number of obstacles coming down the track for the economy too. The IMF confirmed the UK has an inflation problem and is struggling to get out of it. That will continue to put pressure on the consumer. Meanwhile, both businesses and individuals are fearful of what is coming at November’s budget after Rachel Reeves confirmed tax rises are being looked at. Last year showed just how much impact that uncertainty can have on economic growth and now this year appears as if it will be no different.
“Recent corporate surveys have also pointed to a contraction in the manufacturing sector, with factors cited included US tariff uncertainty, weak client confidence, the higher cost backdrop and even the supply chain effects of the Jaguar Land Rover production shutdown. More worryingly, the service economy which has been the strong part of the UK economy for some time, has also showed signs of slowing with the political and economic uncertainty cited as a headwind for activity in the sector – for the second consecutive month services output is estimated to have shown no growth.
“If this government is about stimulating growth, then this Budget needs to restore some much-needed confidence in the outlook. Tax rises will continue to act as a heavy anchor on the economy, and anything that adds yet more inflationary pressure should be shelved for another day.”
