![\"Construction\"](\"https:\/\/dailybusinessgroup.co.uk\/wp-content\/uploads\/2023\/03\/Construction-house-.png\")
Britain\u2019s economy grew by just 0.1% in the final quarter of last year and by the same rate in December, adding to pressure on Chancellor Rachel Reeves to ease cost pressures on businesses.<\/p>\n
The monthly figure for November was revised down from 0.3% to 0.2%. For the whole of 2025 GDP is expected to have increased by 1.3%, following growth of 1.1% in 2024.<\/p>\n
Liz McKeown, director of economic statistics at the Office for National Statistics, said growth was seen \u201cin all main sectors\u201d, though the usually dominant services sector showed no growth, with the main driver instead coming from manufacturing. Construction registered its worst performance in more than four years.<\/p>\n
She said it is the \u201cfirst time we haven\u2019t seen quarterly growth in services in two years\u201d.<\/p>\n
The Bank of England has already revised down its growth forecasts for the\u00a0UK, cutting 2026 projections from 1.2% to 0.9% and 2027 from 1.6% to 1.5%.<\/p>\n
The figures come ahead of the spring statement on 3 March when the Chancellor will update on the economy but is not expected to announce any changes to tax.<\/p>\n
Responding to today\u2019s data, she insisted the government was taking appropriate measures to stimulate the economy. <\/p>\n
\u201cThanks to the choices we have made,\u00a0we\u2019ve\u00a0seen six interest rate cuts since the election, inflation falling faster than predicted and\u00a0ours is the fastest growing\u00a0G7\u00a0economy in\u00a0Europe,\u201d she said.<\/p>\n
\u201cThe Government has the right economic plan to build a stronger and more secure economy, cutting the cost of living, cutting the national\u00a0debt\u00a0and creating the conditions for growth and investment in every part of the country.\u201d\u00a0<\/p>\n
Economists took a more critical view and said more needed to be done to support business.<\/p>\n
Ben Jones, senior lead economist at the CBI, said:\u00a0\u00a0\u201cThe Spring Forecast should\u00a0be a\u00a0critical\u00a0delivery moment for the government\u2019s growth mission. <\/p>\n
\u201cBusinesses want to see government\u00a0take\u00a0action to speed up relief for high industrial energy costs, collaborate\u00a0with firms\u00a0to find\u00a0appropriate landing zones\u00a0for\u00a0the Employment Rights Act, and\u00a0make\u00a0real progress on tax simplification to\u00a0ease the cost of doing business.\u201d\u00a0\u00a0<\/p>\n
Luke Bartholomew, deputy chief economist, at Abderdeen said: \u201cIt is still hard to see what will drive a sustained increase in the underlying rate of growth this year. <\/p>\n
\u201cAll of which means that the Bank of England is set to continue to lower interest rates to try to support growth, and we expect the next cut at the March meeting.\u201d \u00a0<\/p>\n
Jeremy Batstone-Carr, European Strategist at Raymond James Investment Services, said: \u201cRate-setters on the Bank of England\u2019s Monetary Policy Committee have adjusted their hitherto cautious rhetoric and appear ready to cut the base rate for a seventh time,\u00a0perhaps sooner\u00a0rather than later.\u00a0<\/p>\n
\u201cFinancial markets have been quick to price in another near-term rate cut\u00a0in\u00a0March\u00a0and today\u2019s downbeat activity data, coupled with\u00a0slowly falling\u00a0price pressures\u00a0mean\u00a0that\u00a0households and businesses\u00a0might\u00a0not\u00a0have to wait\u00a0too long\u00a0for a further policy loosening.\u201d\u00a0<\/p>\n
David\u00a0Bharier, head of research at the British Chambers of Commerce, said: \u201cImproving the outlook now depends on restoring business dynamism. <\/p>\n
\u201cGovernment must move from strategy to delivery\u00a0\u2013\u00a0backing infrastructure projects,\u00a0speeding up planning decisions,\u00a0addressing skills gaps, and\u00a0strengthening\u00a0export support \u2013 so firms can invest,\u00a0export\u00a0and grow.\u201d\u00a0<\/p>\n
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