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UK's 'sputtering' economic growth slows to 0.3% in Q2: 'We’re in serious trouble'

ended 14. August 2025

EXPERTS are warning the UK's economic growth is “sputtering along rather than firing on all cylinders” as it slowed to 0.3% from April to June, new figures show.

UK gross domestic product (GDP) is estimated to have increased by 0.3% in Quarter 2 (Apr to June) 2025, following an increase of 0.7% in Quarter 1 (Jan to Mar) 2025, according to official data published this morning. 

In output terms, growth in the latest quarter was driven by increases of 0.4% in services and 1.2% in construction, while the production sector fell by 0.3%. 

Real GDP per head is estimated to have grown by 0.2% in the latest quarter and is up 0.7% compared with the same quarter a year ago. 

Meanwhile, in June, monthly real gross domestic product (GDP) is estimated to have grown by 0.4%, following an unrevised fall of 0.1% in May 2025 and a fall of 0.1% in April 2025 (revised up from 0.3%). 

Harry Mills, Director at London-based Oku Markets, said the figures are “evidence of a flat-lining economy”.

He said: "The UK's second-quarter GDP growth was slightly better than forecast at 0.3% q/q, but nevertheless showed a sharp slowdown from the first quarter of this year. Analysts had predicted growth of just 0.1% in the three months to June after a bumper - and deceiving - Q1 performance of 0.7%, reflective of the temporary boost to output caused by a surge in exports to beat the April US tariff deadline.

“Whilst a beat to the forecast is ostensibly good, and I'm sure the government will be screaming about this all day, the figure is evidence of a flat-lining economy. When coupled with the fact that the economy has continued to lose momentum into the third quarter, where leading indicators such as the July PMI surveys point to growth waning further as summer began, it paints a far less rosy picture. 

"Risks remain tilted to the downside as the jobs market shows further evidence of cooling and fiscal tightening looms come the Chancellor's dreaded Autumn Budget.”

Sam Kirk, Managing Director at Retford-based J-Flex Rubber Products, warned we are in serious trouble.

He continued: “Rachel Reeves said growing the economy was her ‘number one priority’, yet GDP has crawled to just 0.3%. If that’s what counts as success in her book, we’re in serious trouble. For all the grand speeches and bold promises, Britain’s economy is barely moving and as long as Reeves is Chancellor, this is about as good as it's going to get.”

Patricia McGirr, Founder at Burnley-based Repossession Rescue Network, added: “These figures show our economy is still sputtering along rather than firing on all cylinders. Not exactly a ring of confidence for Reevenomics. Services are doing the heavy lifting, construction’s had a bounce, but production is still shrinking.

"For households and small businesses, these numbers don’t change the daily reality of high costs, tight margins and tough decisions. The real test is whether growth sticks. We’ve had enough false starts to know one good quarter isn’t a recovery.”

Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, urged Brits not to panic.

She said: “The economy is still growing for now, mainly from services and construction, so I don’t think it’s time for panic yet. I think the focus will move to what the Bank of England does next with interest rates if the economy continues to dawdle along rather than really light up.”

Riz Malik, Director at Southend-on-Sea-based R3 Wealth, added: "Does it feel like the economy is growing? An increasing number of people are telling me about their plans to leave the UK. If more skilled workers leave and unemployment rises, sustaining growth becomes far harder. 

"Economic momentum relies on both a strong workforce and business confidence. Without the right talent in place, investment could slow and productivity suffer, putting the current pace of expansion at risk."

David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth Ltd, said: "These latest figures show economic momentum is easing forward at a glacial pace, reflecting reduced consumer demands and continued global economic uncertainty.

"This 0.4% growth rebound in June follows a few months of contraction could be a false dawn and simply a seasonal recovery. The BoE will likely to use this data to hold interest rates steady for a few months."

9 responses from the Newspage community

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Harry MillsVerified
Director at Oku Markets
The UK's second-quarter GDP growth was slightly better than forecast at 0.3% q/q, but nevertheless showed a sharp slowdown from the first quarter of this year. Analysts had predicted growth of just 0.1% in the three months to June after a bumper - and deceiving - Q1 performance of 0.7%, reflective of the temporary boost to output caused by a surge in exports to beat the April US tariff deadline. Whilst a beat to the forecast is ostensibly good, and I'm sure the government will be screaming about this all day, the figure is evidence of a flat-lining economy, and when coupled with the fact that economic momentum has continued to fade into the third quarter, where leading indicators such as the July PMI surveys point to growth waning further as summer began, it paints a far less rosy picture. Risks remain tilted to the downside as the jobs market shows further evidence of cooling and fiscal tightening looms come the Chancellor's dreaded Autumn Budget.

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Sam KirkVerified
Managing Director at J-Flex Rubber Products
Rachel Reeves said growing the economy was her “number one priority”, yet GDP has crawled to just 0.3%. If that’s what counts as success in her book, we’re in serious trouble. For all the grand speeches and bold promises, Britain’s economy is barely moving and as long as Reeves is Chancellor, this is about as good as it's going to get.
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Patricia McGirrVerified
Founder at Repossession Rescue Network
These figures show our economy is still sputtering along rather than firing on all cylinders. Not exactly a ring of confidence for Reevenomics. Services are doing the heavy lifting, construction’s had a bounce, but production is still shrinking. For households and small businesses, these numbers don’t change the daily reality of high costs, tight margins and tough decisions. The real test is whether growth sticks. We’ve had enough false starts to know one good quarter isn’t a recovery.
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Scott GallacherVerified
Director at Rowley Turton
These figures are a real mixed bag for both the country and the government. On the positive side, the economy did manage some growth — something the Chancellor will no doubt seize upon. However, with growth slowing to just 0.3% in the quarter and business investment falling sharply, it points to a lack of confidence. Taken together, the outlook is far from rosy.
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Riz MalikVerified
Independent Financial Adviser at R3 Wealth
Does it feel like the economy is growing? An increasing number of people are telling me about their plans to leave the UK. If entrepreneurs and skilled workers leave and unemployment rises, sustaining growth becomes far harder. Economic momentum relies on both a strong workforce and business confidence. Without the right talent in place, investment could slow and productivity suffer, putting the current pace of expansion at risk.
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Emma JonesVerified
Managing Director at Whenthebanksaysno.co.uk
The economy is still growing for now, mainly from services and construction, so I don’t think it’s time for panic yet. I think the focus will move to what the Bank of England does next with interest rates if the economy continues to dawdle along rather than really light up.
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David StirlingVerified
Independent Financial Adviser at Mint Wealth
These latest figures show economic momentum is easing forward at a glacial pace, reflecting reduced consumer demands and continued global economic uncertainty. This 0.4% growth rebound in June follows a few months of contraction could be a false dawn and simply a seasonal recovery. The Bank of England will likely to use this data to hold interest rates steady for a few months.
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Craig FishVerified
Director at Lodestone Mortgages
It certainly doesn’t feel like the economy is growing, and I dare say that when we delve deeper into the numbers that as usual we will see they have been massaged. Rachel seems incapable of truly growing the economy and instead hope the BOE will rescue her from the mess she has made. It’s time that there was a change of leadership before it’s too late. We need to really focus on growth and not fumbling along.
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Rob MansfieldVerified
Independent Financial Advisor at Rootes Wealth Management
An increase in construction output is welcome, given the governments aim of building more homes. This could be a key metric to watch for future quarters. An uptick in construction could lead to stronger economic growth later on.