Sluggish end to 2025 for Britain’s economy

February 12, 2026 (MLN): Britain’s economy expanded less than what was forecasted in the final quarter of 2025 adding pressure on Prime Minister Keir Starmer’s government.

Gross domestic product (GDP) rose by 0.1% between October and December after weakness in the services sector, where forecasted growth was of 0.2% for the quarter, APP reported.

The figures arrive as Keir Starmer faces political pressure linked to the Jeffrey Epstein controversy, including criticism over his appointment of Peter Mandelson as UK ambassador to the United States despite past associations with Epstein.

Labour has struggled to accelerate economic momentum since winning the July 2024 general election, having introduced tax increases in its two annual budgets. 

Economic performance was also affected by US trade policy, including tariff measures introduced by President Donald Trump.

Although some of the toughest tariff threats were later eased, uncertainty over global trade led many British firms to delay major investment decisions.

The Bank of England recently lowered its growth outlook, projecting GDP expansion of 0.9% in 2026 and 1.5% in 2027.

Previous forecasts had estimated 1.3% growth for 2026 and 1.6% for the following year.

The downgraded projections came as the central bank decided to hold its benchmark interest rate at 3.75%, with inflation still running above its 2% target.

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