Overview

• UK GDP expanded by 0.3% in Q2 2025, outperforming the 0.1% forecast but slowing from Q1’s 0.7% rebound
• Construction and services led the upswing, with gains in programming, health and vehicle leasing offset by a drop in industrial output
• Unemployment rose to 4.7%, marking a four-year high and signaling a cooling labour market despite overall growth
• Business tax hikes introduced in April plus US tariff measures are already weighing on corporate investment and export prospects
• Economists and the IMF forecast only modest growth ahead with high interest rates plus weak global demand