The UK economy expanded by 1.3% in 2025, improving slightly from 1.1% growth in 2024, with all major sectors contributing to the increase. However, the outcome fell short of the government’s 1.5% growth projection and remained modest by historical standards. The economy faced significant headwinds throughout the year, including substantial tax increases, trade tensions linked to US President Donald Trump’s policies, and a major cyberattack targeting the country’s largest car manufacturer. Also, as the year drew to a close, businesses and consumers stayed cautious ahead of Chancellor of the Exchequer Rachel Reeves’ November 26 budget, despite it refraining from introducing any additional immediate measures.