The UK economy grew by 0.3 percent in November 2025 after the economy shrank by 0.1 percent in the previous month. Since a huge decline in GDP in April 2020, the UK economy has gradually recovered and is now slightly larger than it was before the COVID-19 pandemic. After the initial recovery from the pandemic, however, the UK economy has effectively flatlined, fluctuating between low growth and small contractions since 2022. Labour banking on growth to turn around fortunes In December 2025, just over a year and a half a year after winning the last general election, the approval rating for the new Labour government lower than the previous government, at -60 percent. Furthermore, the Prime Minister, Keir Starmer is far less popular than other major political figures in the UK, while Labour have fallen far behind Reform UK in opinion polls. This sharp decline in popularity began shortly after winning the election due to several damaging policies, especially the withdrawal of the winter fuel allowance for some pensioners. While Labour aims to restore the UK's economic and political credibility in the long term, they will certainly hope for some good economic news sooner rather than later. Economy bounces back in 2024 after ending 2023 in recession Due to two consecutive quarters of negative economic growth, in late 2023 the UK economy ended the year in recession. After not growing at all in the second quarter of 2023, UK GDP fell by 0.1 percent in the third quarter, and then by 0.3 percent in the last quarter. For the whole of 2023, the economy grew by 0.4 percent compared to 2022, and for 2024 grew by 1.1 percent. During the first two quarters of 2024, UK GDP grew by 0.7 percent, and 0.4 percent, with this relatively strong growth followed by zero percent growth in the third quarter of the year. Although the economy had started to grow again by the time of the 2024 general election, this was not enough to save the Conservative government at the time. Despite usually seen as the best party for handling the economy, the Conservative's economic competency was behind that of Labour on the eve of the 2024 election.

The gross domestic product of the United Kingdom in 2024 was around 2.78 trillion British pounds, an increase when compared to the previous year, when UK GDP amounted to about 2.75 trillion pounds. The significant drop in GDP visible in 2020 was due to the COVID-19 pandemic, with the smaller declines in 2008 and 2009 because of the global financial crisis of the late 2000s. Low growth problem in the UK Despite growing by 1.1 percent in 2024 and 0.3 percent in 2023, the UK economy is not much larger than before the COVID-19 pandemic. After recovering from a huge fall in GDP in the second quarter of 2020, the UK economy has alternated between periods of contraction and low growth, with the UK even falling into a brief recession at the end of 2023. Although the economy has grown in subsequent quarters, GDP per capita is lower than it was in 2022, following two years of negative growth. UK's global share of GDP falling As of 2025, the UK had the sixth-largest economy in the world, behind the United States, China, Japan, Germany, and India. Among European nations, this meant that the UK currently has the second-largest economy in Europe, although the economy of France, Europe's third-largest economy, is of a similar size. The UK's global economic ranking will likely fall in the coming years, however, with the UK's share of global GDP expected to fall from 2.16 percent in 2025 to 2.02 percent by 2029.  

In December 2025, the Consumer Price Index including owner occupiers' housing costs (CPIH) inflation rate of the United Kingdom was 3.6 percent, down from the previous month. The inflation rate fell noticeably after the COVID-19 pandemic but rose sharply between Spring 2021 and Autumn 2022. After peaking at 9.6 percent in October 2022, CPIH inflation declined throughout 2023 and into 2024, falling to 2.6 percent by September of that year, before increasing again recently. Cost of living problems persist in late 2025 Although the 2021-2023 inflation crisis has passed, the issues caused by it have lingered into 2025. While the share of households experiencing living cost rises has fallen from 91 percent in August 2022, to 45 percent in July 2024, this share rose in 2025, reaching 72 percent in April. Even with lower inflation, overall consumer prices have already increased by around 20 percent in the last three years, rising to almost 30 percent for food prices, which lower income households typically spend more of their income on. The significant increase in people relying on food banks across the UK, is evidence of the magnitude of this problem, with approximately 3.13 million people using food banks in 2023/24. Other measures of inflation While the CPIH inflation rate displayed here is the preferred index of the UK's Office of National Statistics, the Consumer Price Index (CPI) is often more prominently featured in the media in general. An older index, the Retail Price Index (RPI) is also still used by the government to calculate certain taxes and rail fares. Other metrics include the core inflation rate, which measures price increases without the volatility of food and energy costs, while price increases in goods and services can also be tracked separately. The inflation rate of individual sectors can also be measured, and as of December 2025, prices were rising fastest in the education sector, at 7.6 percent, with costs falling in the clothing, and furniture sectors.

In the 3rd quarter of 2025, the employment rate in the United Kingdom was 75 percent, down from 75.3 percent in the previous quarter. After almost dropping to 70.1 percent in 2011, the employment rate in the United Kingdom started to climb at a relatively fast pace, peaking in early 2020. Due to the onset of the COVID-19 pandemic, however, employment declined to 74.6 percent by January 2021. Although not quite at pre-pandemic levels, the employment rate has since recovered. Labor market trouble in 2025? Although unemployment in the UK spiked at 5.3 percent in the aftermath of the COVID-19 pandemic, it fell throughout most of 2022, to just 3.6 percent in August 2022. Around that time, the number of job vacancies in the UK was also at quite high levels, reaching a peak of 1.3 million by May 2022. The strong labor market put employees in quite a strong position, perhaps encouraging the high number of resignations that took place around that time. Since 2023, however, the previously hot labor market has cooled, with unemployment reaching 4.6 percent in April 2025 and job vacancies falling to a four-year low of 736,000 in May 2025. Furthermore, the number of employees on UK payrolls has fallen by 227,500 in the first five months of the year, indicating that 2025 will be a tough one for the labor market. Headline economic measures revised in early 2025 Along with the unemployment rate, the UK's inflation rate is also expected to be higher than initially thought in 2025, reaching a rate of 3.2 percent for the year. The economy will also grow at a slower pace of one percent rather than the initial prediction of two percent. Though these negative trends are not expected to continue in the long term, the current government has already expended significant political capital on unpopular decisions, such as the cutting of Winter Fuel Payments to pensioners in 2024. As of June 2025, they are almost as unpopular as the previous government, with a net approval rating of -52 percent.

In 2024, gross domestic product per capita in the United Kingdom was 40,157 British pounds, compared with 40,162 pounds in the previous year. In general, while GDP per capita has grown quite consistently throughout this period, there are noticeable declines, especially between 2007 and 2009 and between 2019 and 2020, due to the Global Financial Crisis and the COVID-19 pandemic, respectively. Why is GDP per capita stagnating when the economy is growing? During the last two years that GDP per capita fell and then stagnated in the UK, the overall economy grew by 0.4 percent in 2023 and 1.1 percent in 2024. While the overall UK economy is therefore larger than it was in 2022, the UK's population has grown at a faster rate, resulting in the lower GDP per capita figure. The long-term slump in the UK's productivity, as measured by output per hour worked, has meant that the gap between GDP growth and GDP per capita growth has been widening for some time. Economy remains a major concern for voters Along with immigration, the economy was seen as the main issue facing the UK, just ahead of health, and several other problems in the country. While Brexit was seen as the most important issue before COVID-19, and concerns about health were dominant throughout 2020 and 2021, the economy has generally been the primary facing voters issue since 2022. The surge in inflation throughout 2022 and 2023, and the impact this had on wages and living standards, resulted in a very tough period for UK households. As of October 2025, 63 percent of households were still noticing rising living costs, although this is down from a peak of 91 percent in August 2022.

Annual estimates of balanced UK regional gross domestic product (GDP). Current price estimates and chained volume measures for UK countries, ITL1, ITL2 and ITL3 regions.

The Gross Domestic Product (GDP) in the United Kingdom expanded 0.10 percent in the fourth quarter of 2025 over the previous quarter. This dataset provides the latest reported value for - United Kingdom GDP Growth Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

Annual estimates of balanced UK regional gross domestic product (GDP). Current price estimates and chained volume measures for combined authorities and city regions.

United Kingdom Balance of Payments: Current Account data was reported at -13,995.000 GBP mn in Sep 2025. This records an increase from the previous number of -28,081.000 GBP mn for Jun 2025. United Kingdom Balance of Payments: Current Account data is updated quarterly, averaging -6,452.000 GBP mn from Mar 1955 (Median) to Sep 2025, with 283 observations. The data reached an all-time high of 8,958.000 GBP mn in Dec 2022 and a record low of -39,329.000 GBP mn in Sep 2016. United Kingdom Balance of Payments: Current Account data remains active status in CEIC and is reported by Office for National Statistics. The data is categorized under Global Database’s United Kingdom – Table UK.JB: BPM6: Balance of Payments.

UK: GDP: Net Current Transfer from Abroad data was reported at -24,349.000 GBP mn in 2016. This records an increase from the previous number of -24,699.000 GBP mn for 2015. UK: GDP: Net Current Transfer from Abroad data is updated yearly, averaging -4,642.299 GBP mn from Dec 1970 (Median) to 2016, with 36 observations. The data reached an all-time high of 522.682 GBP mn in 1986 and a record low of -26,863.000 GBP mn in 2013. UK: GDP: Net Current Transfer from Abroad data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s UK – Table UK.World Bank: Gross Domestic Product: Nominal. Current transfers comprise transfers of income between residents of the reporting country and the rest of the world that carry no provisions for repayment. Net current transfers from abroad is equal to the unrequited transfers of income from nonresidents to residents minus the unrequited transfers from residents to nonresidents. Data are in current local currency.; ; World Bank national accounts data, and OECD National Accounts data files.; ;

The inflation rate for the Retail Price Index (RPI) in the United Kingdom was 4.2 percent in December 2025, down from 3.8 percent in the previous month. From 2021 onwards, prices in the UK rose rapidly, with the RPI inflation rate peaking at 14.2 percent in October 2022. Although inflation fell in subsequent months, it wasn't until July 2023 that inflation fell below double digits, and as of late 2024, the RPI rate was still above three percent. The CPI and CPIH While the retail price index is still a popular method of calculating inflation, the consumer price index (CPI) is the current main measurement of inflation in the UK. There is also an additional price index, which includes some extra housing costs, known as the Consumer Price Index including homer occupiers' costs (CPIH) index, which is seen by the UK's Office of National Statistics as the official inflation rate. As of November 2025, the CPI inflation rate stood at 3.2 percent, while the CPIH rate was 3.5 percent. Decline in core inflation in 2025 Another way of measuring inflation is to strip out the volatility of energy and food prices and look at the underlying core inflation rate. As of the third quarter of 2025, this was 3.6 percent, slightly below than the overall CPI rate, but more aligned with the overall figure than it was in 2022 and 2023. When inflation peaked at 11.2 percent in October 2022, for example, core inflation stood at just 6.5 percent. After energy prices in 2023 fell relative to 2022, the overall inflation rate in the UK declined quite rapidly, with core inflation overtaking the overall rate in July 2023. During the most recent period of high inflation, core inflation peaked at 7.1 percent in May 2023, and while taking longer to fall than the overall figure, has generally been declining since then.

Full Year GDP Growth in the United Kingdom increased to 1.30 percent in 2025 from 1.10 percent in 2024. This dataset includes a chart with historical data for the United Kingdom Full Year Gdp Growth.

Quarterly transactions in trade in goods and services, primary, secondary and investment income, transactions with EU and non-EU countries and capital account.

UK: GDP: USD: Net Current Transfer from Abroad data was reported at -32.876 USD bn in 2016. This records an increase from the previous number of -37.735 USD bn for 2015. UK: GDP: USD: Net Current Transfer from Abroad data is updated yearly, averaging -7.286 USD bn from Dec 1970 (Median) to 2016, with 36 observations. The data reached an all-time high of 766.171 USD mn in 1986 and a record low of -41.996 USD bn in 2013. UK: GDP: USD: Net Current Transfer from Abroad data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s UK – Table UK.World Bank: Gross Domestic Product: Nominal. Current transfers comprise transfers of income between residents of the reporting country and the rest of the world that carry no provisions for repayment. Net current transfers from abroad is equal to the unrequited transfers of income from nonresidents to residents minus the unrequited transfers from residents to nonresidents. Data are in current U.S. dollars.; ; World Bank national accounts data, and OECD National Accounts data files.; ;

Quarterly levels for UK gross domestic product (GDP) at current market prices.

London’s Economic Outlook is GLA Economics’ London forecast. The forecasts are issued every six months to assist those preparing planning projections for London in the medium term. The report contains the following: An overview of recent economic conditions in London, the UK and the world economies with analysis of important events, trends and risks to short and medium-term growth. The ‘consensus forecast’ – a review of independent forecasts indicating the range of views about London’s economy and the possible upside and downside risk. In this context, ‘consensus forecast’ refers to the average of the independent forecasters. The GLA Economics forecast for output, employment, household expenditure and household income in London. Provided below are links to the current and previous versions of GLA Economics' medium term forecast for the level and growth rate of London's GVA, employment, household income and household expenditure. Forecasts for the growth and level of employment and GVA for selected sectors of the economy are also included. All output variables are measured in terms of output at basic prices. All growth rates are in percentage change per annum. All employment levels are in millions. All output levels are in £bn.

In December 2025, the UK inflation rate was 3.4 percent, with prices rising fastest in the education sector, which had an inflation rate of 7.6 percent. In this month, prices were rising in most sectors, but were falling in the furniture, household equipment and maintenance sector. UK inflation rises in 2025 After reaching a peak of 11.1 percent in October 2022, the CPI inflation rate in the UK gradually declined over several months, falling to a low of 1.7 percent by August 2024. An uptick in inflation has occurred since that month, however, and by September 2025, inflation was at 3.8 percent, far above the Bank of England's target rate of two percent. Going into 2026, recent forecasts suggest that over the course of the year, inflation will average out at 2.5 percent, with the two percent target not met on an annual basis until at least 2027. Roots of the inflation crisis This long period of high inflation that the UK and much of the world experienced had its roots in the post-pandemic economic recovery of 2021. During that year, as consumer demand returned, global supply chains struggled to return to full capacity, resulting in prices rising. With inflation already elevated going into 2022, Russia's invasion of Ukraine added even more inflationary pressures to the global economy. European markets which were heavily reliant on Russian oil and gas gradually phased out hydrocarbons from their economies. Food prices were also heavily impacted due to Ukraine's difficulty in exporting its agricultural products.

The Gross Domestic Product (GDP) in the United Kingdom was worth 3643.83 billion US dollars in 2024, according to official data from the World Bank. The GDP value of the United Kingdom represents 3.43 percent of the world economy. This dataset provides the latest reported value for - United Kingdom GDP - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

UK: GDP: Real: Net Current Transfer from Abroad data was reported at -16,012.095 GBP mn in 2013. This records a decrease from the previous number of -5,375.578 GBP mn for 2012. UK: GDP: Real: Net Current Transfer from Abroad data is updated yearly, averaging 0.000 GBP mn from Dec 1960 (Median) to 2013, with 54 observations. The data reached an all-time high of 28,210.320 GBP mn in 2008 and a record low of -16,012.095 GBP mn in 2013. UK: GDP: Real: Net Current Transfer from Abroad data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s United Kingdom – Table UK.World Bank.WDI: Gross Domestic Product: Real. Current transfers comprise transfers of income between residents of the reporting country and the rest of the world that carry no provisions for repayment. Net current transfers from abroad is equal to the unrequited transfers of income from nonresidents to residents minus the unrequited transfers from residents to nonresidents. Data are in constant local currency.; ; World Bank national accounts data, and OECD National Accounts data files.; ;