U.K. Growth Loses Momentum at End of 2025, Keeping Pressure on Bank of England

The U.K. economy expanded only modestly in the final month of 2025, reinforcing expectations that the Bank of England will remain under pressure to continue easing monetary policy as the new year unfolds.

Data released on Thursday showed that gross domestic product grew by just 0.1% in December, marking a slowdown from the 0.2% expansion recorded in November. The previous month’s figure had been revised down from an earlier estimate of 0.3%, after a temporary boost from carmaker Jaguar Land Rover’s recovery from a cyber attack lifted output.

On a quarterly basis, economic growth remained subdued. GDP rose by just 0.1% in the final three months of 2025, unchanged from the pace seen in the July–September period. As a result, the U.K. economy grew by 1.0% over the full year of 2025—still weak by historical standards and slightly below the 1.1% expansion recorded in 2024.

Sector-level data highlighted ongoing fragility in the industrial side of the economy. Manufacturing output contracted by 0.5% in December, reversing sharply from the strong 1.9% growth seen in November, which had been revised down from an initial 2.1%. The earlier surge was partly driven by the continued normalization of operations at Jaguar Land Rover’s factories following last year’s cyber disruption.

The latest figures underscore the uneven nature of the U.K.’s recovery, with growth struggling to gain traction despite isolated sector-specific rebounds. With economic momentum fading and inflation pressures gradually easing, the data is likely to strengthen the case for further monetary easing by the Bank of England in the months ahead.