"While the economy is growing, the pace of recovery remains limited after several years of subdued growth. The composition of activity continues to matter. Services output provided the primary contribution to growth, supported by a gradual improvement in real household incomes. In contrast, production and construction activity remained relatively weak, reflecting cautious investment decisions, ongoing financing constraints and uncertainty around future demand. Consumer spending showed signs of stabilisation, but remained far from robust, particularly in interest-sensitive sectors."
"However, consumer confidence isn't driven by intangible metrics like 'GDP' or 'CPI' - it's driven by people's everyday experiences. Despite what growth metrics may suggest, average living standards have not improved in the last decade. Unless there are clear signs that stagnant living standards will end, and unless public expectations shift and consumers' animal spirits are reignited, a thriving economy remains more of a pipe dream than a reality."
The UK economy expanded by 0.1% in the final quarter of 2025, ending the year with modest positive momentum. Growth remains limited after several years of subdued expansion. Services were the primary growth driver, supported by gradual improvement in real household incomes. Production and construction stayed weak amid cautious investment, financing constraints and demand uncertainty. Consumer spending stabilised but remained weak in interest-sensitive sectors. The household savings ratio has hovered at or above 10% since mid-2024, reflecting unease about the long-term trajectory. Consumer confidence remains persistently negative and living standards have not improved over the past decade, limiting the outlook for stronger spending.
Read at London Business News | Londonlovesbusiness.com
Unable to calculate read time
Collection
[
|
...
]