The UK economy slowed in the second quarter, falling from 0.7% to 0.3% growth after a strong start to the year. Data from the Office for National Statistics (ONS) was in line with expectations.
Annual growth for 2024 remained at 1.1%, while growth for the 12 months up to the end of June 2025 was revised to 1.4%. GDP per capita rose by 0.9% despite population growth due to high immigration.
In the first half of the year, the UK was the fastest-growing economy among the G7 countries. However, according to experts, some of this increase was due to temporary factors. The Central Bank forecasts that growth will remain at 1.25% throughout 2025. Economists say that Finance Minister Rachel Reeves may be forced to implement large tax increases in the budget to be presented in November. Rising US tariffs, high borrowing costs, and cuts in social spending are increasing fiscal pressures. Furthermore, the current account deficit has reached its widest level in two years, at £28.9 billion (3.8% of GDP). This situation was attributed to the increase in dividends paid to foreign investors.
