13 November 2025
If you are covering the latest UK GDP figures, please find below a comment from Lindsay James, investment strategist at Quilter:
"Today’s GDP release confirms what recent data has hinted at – the UK economy is struggling to maintain momentum as we head towards year-end. Monthly growth has fallen by 0.1%, with August’s figure also downgraded to no growth. The three-month rate shows growth of just 0.1%, a step down from the 0.7% seen in Q1 and the 0.3% delivered in Q2, with industrial output back in contraction in September, partly due to the Jaguar Land Rover cyber-attack issues. This paints a picture of an economy that started 2025 strongly but is now badly losing steam just as the Chancellor prepares for a pivotal Autumn Budget. Her next move will be critical if she is to recover Labour’s economic growth mission and prevent any whispers of a recession looming.
“The nature of this Budget remains crucial for what comes next. Encouragingly, inflation appears to have peaked, with rate cuts on the horizon. However, uncertainty over potential tax rises and persistent rumours of employers being targeted yet again, such as through an ill thought-out attack on DC pension contributions via salary sacrifice, risks snuffling out fragile business confidence and pushing unemployment, already now at 5%, markedly higher. It appears lessons from last year’s budget which pushed up employer national insurance contributions, with an ensuing inflationary impact on service sector price inflation and the labour market, have not yet been learned. Manufacturing surveys point to contraction, and even the services sector – traditionally the UK’s growth engine – has seen downgrades in its growth.
“Against this, gilt yields have eased from January highs, ultimately a positive given current government borrowing levels. However, fiscal policy decisions at the Budget in less than two weeks will be critical in shaping sentiment. If the government is serious about stimulating growth, the Budget must restore confidence and avoid measures that risk adding further inflationary pressure or denting the labour market. Investors should expect volatility but also remember that UK equities have shown resilience this year, underlining the importance of diversification in uncertain times."
