UK financial system grew quicker than thought in first six months of Labour authorities – enterprise reside | Enterprise
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Key occasions
Family financial savings price rises as shoppers flip cautious
UK households saved more cash within the second quarter of this 12 months – presumably an indication of warning concerning the financial outlook.
The households’ saving ratio is estimated to have elevated to 10.7% in Quarter 2 2025, up from 10.5% within the first quarter of this 12 months, attributable to an increase in non-pension saving.
Thomas Pugh, chief economist at main audit, tax and consulting agency RSM UK says:
“As anticipated, headline GDP development in Q2 was unchanged at 0.3% q/q. However the enhance within the saving ratio suggests shoppers turned extra cautious within the second quarter. The massive query now could be whether or not hypothesis concerning the price range will undermine confidence additional.
“Headline development remained at 0.3% in Q2. However the saving price elevated from an already excessive 10.5% to 10.7%. This was pushed by a rise in non-pension saving suggesting that client warning after April’s tax and tariff will increase prompted households to save lots of extra. Certainly, family spending development remained weak at simply 0.1% q/q.
There’s some disappointing information in at this time’s GDP report, although – the manufacturing sector suffered a sharper downturn within the final quarter, and the constructing sector grew extra slowly than estimated.
The manufacturing sector is estimated to have fallen by 0.8% in Quarter 2 2025 (beforehand estimated as a 0.3% fall), the ONS studies. This downturn was pushed by decrease energy technology and gasoline manufacturing.
Providers output elevated by an unrevised 0.4% in Quarter 2 2025,
And development output is estimated to have grown by 1.0% in Quarter 2 2025 (beforehand a 1.2% enhance).
Building output for Q2 2025 was revised down from the @ONS earlier estimate of 1.2% to 1%. New Infrastructure work continued to prop up development, rising 2.9% alongside restore and upkeep of personal housing, which grew 4.4%. pic.twitter.com/zSkOr3a85F
— Emma Fildes (@emmafildes) September 30, 2025
Introduction: UK development in early months of Labour authorities revised up
Good morning, and welcome to our rolling protection of enterprise, the monetary markets and the world financial system.
Britain’s financial system has grown quicker than first estimated within the first six months of the Labour authorities.
Up to date financial information launched this morning reveals that the financial system did not stagnate within the third quarter of final 12 months, as Keir Starmer, Rachel Reeves and colleagues took the helm with gloomy warnings concerning the problem forward.
Having beforehand mentioned GDP was flat in July-September 2024, the Workplace for Nationwide Statistics has recrunched the numbers and concluded the financial system really grew by 0.2% – modest development, however higher than none in any respect.
Development in October-December 2024 has additionally been revised up, from 0.1% to 0.2%.
The efficiency of the financial system within the final six months of Conservative rule has additionally been revised. Development in Q1 2024 has been reduce from 0.9% to 0.8%, whereas development in April-June 2024 has been revised up from 0.5% to 0.6%.
Though these modifications are minor, and historic, they do undermine the narrative that fears over Reeves’s price range plans chilled the financial system to a standstill final 12 months.
One thing for Labour to ponder at their social gathering convention this week, the place the prime minister is predicted to inform members that his financial technique might be the “antidote to division”.
GDP figures for 2025 haven’t been revised although – the financial system nonetheless grew by 0.7% in January-March, slowing to 0.3% in April-June.
And the large image is that the extent of GDP in Quarter 2 2025 in contrast with Quarter 4 (Oct to Dec) 2023 is now estimated to be 2.9% increased, revised up from the primary estimate of two.6%, the ONS says.
ONS director of financial statistics Liz McKeown explains:
“At this time’s figures embrace a set of enhancements to our measurement of the financial system, together with higher data on analysis and improvement and the actions of advanced multinational corporations, alongside the standard inclusion of up to date and improved information sources.
“Development for 2024 as an entire is unrevised, although these new figures present the financial system grew rather less strongly initially of final 12 months than our preliminary estimates urged however carried out higher in later quarters. Quarterly development charges for 2025 are unrevised.
The agenda
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7am BST: GDP quarterly nationwide accounts, UK: April to June 2025
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10.30am BST: European Central Financial institution president Lagarde speaks on the Financial institution of Finland’s financial coverage convention
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3pm BST: US JOLTS vacancies information
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