UK GDP Monthly Estimate: September 2025 – A Snapshot of Subdued Growth

Reviewing recent periods provides context for the current slowdown.

1. Three months to June 2025 (April–June): +0.2% – Modest expansion, supported by services.
2. Three months to July 2025 (May–July): +0.2% – Stable, with balanced sectoral contributions.
3. Three months to August 2025 (June–August): +0.2% (revised down from +0.3%) – Slight softening in services offset production gains.
4. Three months to September 2025 (July–September): +0.1% – Further moderation, led by production declines.

Averaging the year to date, 2025 shows quarterly growth around 0.15%–0.2%, compared to 0.4% in the same period of 2024. This reflects a cooling from last year's more dynamic recovery.

Overall, 2025 is shaping up to be weaker than 2024

Real GDP growth stems from three main sectors: services (about 80% of the economy), production (including manufacturing and energy), and construction. In the three months to September 2025, these areas contributed unevenly, with services offering support amid broader weakness.

Services grew 0.2%, adding to overall expansion through gains in arts and entertainment (+3.5%) and public administration (+0.8%). Production fell 0.5%, subtracting from growth, with manufacturing down 0.8% (transport equipment -4.5%, contributing -0.68 percentage points) and mining down 1.5%.

Construction rose 0.1%, providing a small positive contribution via repair and maintenance (+0.6%), though new work dipped -0.2%.

Monthly in September, the picture sharpened: services up 0.2% (wholesale and retail +1.4%), production -2.0%, and construction +0.2%. Overall, services continue to anchor activity, but production's drag highlights vulnerabilities in export-sensitive areas.

Your Job and Income

The 0.1% quarterly growth suggests a stable but cautious job market, with services' 0.2% rise supporting roles in retail, entertainment, and administration—areas employing many workers. Unemployment may hold around 4.8%, but production's -0.5% decline could pressure manufacturing jobs, potentially limiting wage gains. For you, this means reliable employment in service sectors, but income growth feels gradual, allowing for modest budgeting without sudden cuts.

Prices and Inflation

Subdued 0.1% GDP expansion helps keep inflation in check, as slower production (-0.5%) eases supply pressures on goods like vehicles. Monthly services growth of 0.2% supports steady consumer prices, though motor manufacturing's 28.6% drop may temporarily raise car costs. In practice, this translates to predictable rises in groceries and fuel, giving households more planning confidence than in higher-growth periods.

Buying a home or a car

Construction's 0.1% gain points to ongoing but limited housing activity, with new work flat and private commercial up 2.5% monthly—potentially stabilising home prices in some areas. Production weakness, especially vehicles (-10.3% over three months), could mean higher new car prices short-term. If you're in the market, this data encourages monitoring for rate relief, as subdued growth may prompt easier borrowing conditions ahead.

Your Savings and investments

A 0.1% GDP pace bolsters safer assets like bonds, with yields steady around 4.0%, while services' resilience supports stock sectors like retail (up modestly post-release). Production drags may weigh on manufacturing indices, adding volatility. For your portfolio, this balanced but weak growth favors diversified, service-heavy holdings, with potential for 4-5% annual returns if trends hold.

The UK economy has shifted toward moderation after post-pandemic highs. The following table illustrates this trend toward lower growth rates compared to the immediate recovery period.This shift shows a return to low-growth normality after post-pandemic highs