UK economic growth has slowed, with GDP increasing by just 0.3 per cent in April to June 2025.
The latest data from the Office for National Statistics showed the economy grew in quarter 2 (April to June) but not at the rate of quarter 1 (January to March) when GDP increased by 0.7 per cent.
Growth in the latest quarter was attributed to a 0.4 per cent increase in services output, 1.2 per cent in construction, while production output fell by 0.3 per cent.
Meanwhile, monthly GDP is estimated to have grown 0.4 per cent in June, up from a fall in May.
Lindsay James, investment strategist at Quilter, said the encouraging growth seen in the first quarter of the year was “a mirage” and unlikely to be repeated anytime soon.
“GDP growth in the second quarter has dropped to 0.3 per cent, and the UK appears to be stuck back where it was — anaemic growth with little sign of improvement.
“Although today’s GDP data is slightly better than expected and June’s growth came in at 0.4 per cent, figures released earlier this week highlight where a lot of the issues lie.
“The labour market is weakening, the government appears to be planning for additional tax hikes in the Autumn and global factors make business planning difficult,” she explained.
Luke Bartholemew, deputy chief economist, at Aberdeen, felt the slow pace of growth was likely to remain through the second half of the year, as incomes continue to be squeezed by high inflation
“This report is likely to confirm the impression among Bank of England policymakers that there is no rush to cut rates again soon, and the September meeting is very likely to see interest rates kept on hold,” he added.
alina.khan@ft.com
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