UK economy posts sluggish 0.1% growth - 12th February 2026

Official figures from the Office for National Statistics show the UK economy grew by just 0.1% in the final quarter of 2025, matching the previous quarter’s slow pace and falling short of the 0.2% most economists had forecast. Annual GDP is estimated to have grown by 1.3% in 2025, slightly above 2024’s growth but still reflecting subdued momentum. 

Underlying the weak headline figure was a marked fall in the construction sector, which fell by 2.1% over the quarter - its lowest quarterly performance since late 2021, while services stagnated and production provided the main positive contribution to growth at 1.2%.

The fall in construction activity highlights ongoing challenges for the sector, particularly private building work, which saw notable declines in the final months of 2025. Analysts say this underscores the difficulties in meeting government ambitions to boost house building. Government plans to ease planning regulations and build more than 1.3 million new homes over the next five years, aiming to take housing output to its highest levels in decades appears to be stalling.

Economists argue that failing to sufficiently ramp up housing construction not only affects supply but also limits broader economic momentum, given the sector’s role in investment and job creation. The latest figures suggest renewed focus will be needed if the government is to hit its targets and support more robust economic growth in 2026.