UK economic growth slows to 0.3% in second quarter of 2025

The UK economy grew by 0.3% in the second quarter of 2025, slowing from the stronger pace seen earlier in the year but still outperforming economists’ expectations, according to official figures.

The Office for National Statistics (ONS) said gross domestic product (GDP) increased by 0.3% between April and June, compared with 0.7% growth in the first quarter. Economists had widely forecast growth of just 0.1% after a weak spring, but stronger activity in June and revisions to earlier data lifted the overall figure.

On an annual basis, GDP rose by 1.2% compared with the same period last year.

Growth in services, which rose by 0.4%, and construction, up 1.2%, offset a 0.3% fall in the production sector. Real GDP per head increased by 0.2% over the quarter, and is now 0.7% higher than a year ago.

The monthly data showed the economy expanding by 0.4% in June, following small declines in April and May. The rebound was helped by growth across all major sectors.

The slowdown follows a period of stronger activity earlier in the year, when businesses brought forward orders to get ahead of US President Donald Trump’s tariff measures and changes to UK stamp duty. But rising costs, including higher National Insurance contributions for employers, have weighed on firms’ ability to invest.

Mike Randall, chief executive of Simply Asset Finance, said the figures reflected the pressure many businesses are under:

“Sluggish GDP growth this quarter shines a further spotlight on the business impact of National Insurance hikes. As costs have increased, investing in growth and innovation has, for the time being, had to take a back seat for SMEs.

“Despite this bump in the road, businesses on the ground remain keen to press on – and with recent infrastructure announcements from the Government across the country – the potential for growth is sky high. But this requires businesses to have ready access to the right funding and support so they can strike while the iron is hot. Both the government and specialist lenders will play an important role here – giving businesses the toolkit needed to make their ambitions a reality.”