UK GDP growth slows sharply in second quarter, ONS confirms

The UK economy grew by 0.3% in the second quarter of 2025, official figures confirmed today, marking a sharp slowdown from the brisk 0.7% expansion recorded in the first three months of the year.

The Office for National Statistics (ONS) said the growth figure for April to June was unrevised, confirming that momentum eased as consumers and businesses adjusted after a stronger start to the year. Economists have partly attributed the slowdown to activity being brought forward in the first quarter, particularly in the housing market, as buyers rushed to beat the rise in stamp duty.

The ONS added that 2024 GDP growth was unchanged at 1.1% overall, though there were small revisions to the quarterly path, with the first quarter of that year revised down and later quarters revised up.

In sector terms, Q2 growth was supported by a 0.4% rise in services and a 1.0% increase in construction, while the production sector fell by 0.8%. Business investment declined by 1.1%, suggesting companies are holding back on expansion.

Households saw a slight improvement, with real disposable income per head up 0.2% after a 0.9% drop in the first quarter. The household saving ratio also ticked up to 10.7%, driven by higher non-pension saving.

The confirmation of slower growth comes just weeks after the ONS reported that GDP was flat in July, following 0.4% growth in June, fuelling concerns that the economy is losing steam heading into the autumn.

Business groups said the figures underline the need for the government to bolster confidence. Mike Randall, CEO of Simply Asset Finance, said:

“Weaker GDP growth underlines the pressures that continue to weigh on businesses, and suggests some could still be feeling the lingering effects of employer cost increases in April. The Bank of England’s decision to reduce interest rates in May has offered stability however, and we’re seeing firms using that certainty to push ahead with investment plans.

“This now makes the Autumn Budget even more important. The Government must give businesses confidence through clarity on business taxes, a clear plan for growth, and stronger support for business investment. With the right measures in place, SMEs will be able to turn uncertainty into action and keep driving the economy forward.”

The figures represent another challenge for Chancellor Rachel Reeves as she prepares her Autumn Budget, with pressure mounting to set out policies that can sustain growth while reassuring markets on the public finances.