The UK economy meaningfully tipped into recession at the end of 2023. It bounced back in the first half of 2024, remarkably healthy despite all the bad juju lurking in the soup. Recent data reveals that the UK’s gross domestic product (GDP) grew by 0.3% over the three months leading to August 2024, suggesting a positive trajectory. Investment adviser, Verity Asset Management 3 The UK will still be the world’s second-fastest-growing major economy in 2025 according to the International Monetary Fund (IMF). That’s a huge turnaround from previous projections.
Write the story of the strong start for the UK economy in 2025. It has run into a headwind these past few months, clouding that rosy expectation. The IMF’s prediction surpasses the Office for Budget Responsibility’s (OBR) earlier forecast of a mere 1% growth. Chancellor Rachel Reeves welcomed the IMF’s increased forecast, but recognized the pain that still persists for millions of residents. “For too many people, our economy feels stuck,” she stated, emphasizing the ongoing struggles that households encounter in this fluctuating economic climate.
This is a cause for celebration, given the Office for National Statistics (ONS) just released our quarterly figures. They demonstrate that the UK economy expanded by 0.1% in August 2025, recovering from a GDP contraction of 0.1% in July 2025. That means we’re in a shallow recovery stage, where any modest growth remains deeply buried in the hole created from prior losses. The Labour government elected in July 2024 promised to make economic growth the central plank of its agenda. The administration’s economic forecast assumes 1.3% GDP growth for both 2025 and 2026. This would send a powerful signal of the nation’s long-term commitment to improving economic conditions.
The ONS has an important responsibility in providing an accurate and impartial monitoring of the UK economy. Each month, it releases preliminary GDP estimates for the previous month. It takes three different approaches—output, expenditure, and income—to provide the most rounded picture possible of economic performance. Secondly, since 2010, the ONS has mandated well-being measures alongside economic indicators, showing a deeper understanding of what true progress requires.
As an aside, the UK produces these GDP estimates with astonishing rapidity. Its timely release of figures about 40 days after the quarter closes is the fastest of any major economies. This forward-looking reporting gives our policymakers and economists the ability to react quickly and efficiently to new economic realities.