UK Economy Grows 0.3% in Q2 2025, Beating Expectations
Britain’s economy expanded by 0.3% in the second quarter of 2025, outperforming forecasts of just 0.1%. The growth followed a strong 0.7% increase in the first quarter, offering a boost to Finance Minister Rachel Reeves.
Data from the Office for National Statistics (ONS) showed that GDP in June alone rose by 0.4%, reversing a 0.1% drop in May. The rebound was driven by strong growth across services, industrial output, and construction.
Compared to the same quarter last year, UK GDP rose 1.2%, ahead of economists’ median forecast of 1.0%. The British pound strengthened slightly against the U.S. dollar after the release of the figures.
Reeves has emphasized that the UK delivered the fastest economic growth among the G7 nations in the first quarter. However, the outlook for the second half of 2025 remains cautious.
The economy faces challenges from global trade uncertainty linked to higher U.S. import tariffs, along with a slowdown in domestic hiring. The weaker job market partly reflects higher employment taxes and a sharp rise in the minimum wage.
In July, the International Monetary Fund projected UK growth at 1.2% for 2025 and 1.4% for 2026. This pace is expected to be slightly faster than the eurozone and Japan but slower than the United States and Canada.
