UK GDP Growth Rate YoY: November 2025 Analysis and Macro Outlook
The UK’s GDP growth rate slowed slightly to 1.30% YoY in November 2025, below estimates but steady versus prior months. Core indicators show moderate expansion amid tightening monetary policy and fiscal restraint. External risks and market sentiment remain mixed, with structural challenges tempering long-term outlooks.
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The UK’s latest GDP growth rate YoY for November 2025 registered at 1.30%, according to the Sigmanomics database. This figure is slightly below the 1.40% consensus estimate and the previous 1.40% reading from September 2025. Over the past year, growth has fluctuated between 0.70% and 1.50%, reflecting a moderate but uneven recovery trajectory since late 2024.
Drivers this month
- Consumer spending remained resilient, contributing approximately 0.50 percentage points (pp) to growth.
- Business investment showed modest gains, adding 0.30 pp.
- Net exports detracted 0.20 pp amid a stronger pound and global trade headwinds.
- Government spending was flat, reflecting fiscal consolidation efforts.
Policy pulse
The Bank of England’s monetary policy remains restrictive, with the base rate steady at 5.25%. Inflation has cooled to 3.10% YoY but remains above the 2% target, limiting scope for easing. The GDP growth rate at 1.30% signals a slowdown from earlier 2025 peaks but still outpaces the 12-month average of 1.10%.
Market lens
Immediate reaction: GBP/USD dipped 0.15% post-release, reflecting disappointment versus estimates. UK 2-year gilt yields rose 5 basis points, pricing in persistent monetary tightening. Breakeven inflation swaps edged down slightly, signaling tempered inflation expectations.
Core macroeconomic indicators underpin the GDP growth narrative. Employment remains robust with the unemployment rate steady at 3.70%, near historic lows. Wage growth accelerated to 4.20% YoY, supporting consumer demand despite higher borrowing costs. Inflation’s gradual decline to 3.10% YoY has eased pressure but remains above target.
Monetary Policy & Financial Conditions
The Bank of England’s firm stance on interest rates aims to anchor inflation expectations. Credit conditions have tightened, with mortgage approvals down 6% YoY. The yield curve remains inverted between 2- and 10-year gilts, signaling market caution about growth prospects.
Fiscal Policy & Government Budget
Fiscal policy remains conservative. The government’s budget deficit narrowed to 3.80% of GDP in FY2024/25, down from 4.50% the prior year. Public investment is targeted toward infrastructure but constrained by debt servicing costs rising to 3.20% of GDP. Tax policy remains broadly neutral, limiting stimulus potential.
External Shocks & Geopolitical Risks
Global trade tensions and energy price volatility continue to weigh on the UK economy. The pound’s recent appreciation, partly due to safe-haven flows amid geopolitical uncertainty in Eastern Europe, has dampened export competitiveness. Brexit-related trade frictions persist but have stabilized.
This chart highlights a UK economy in moderate expansion, trending sideways after a strong early 2025 rebound. The growth rate’s stability above 1% suggests ongoing recovery but signals caution amid tightening financial conditions and external risks.
Market lens
Immediate reaction: GBP/USD fell 0.15% within the first hour, reflecting investor disappointment. UK gilts saw a mild sell-off, with 2-year yields rising 5 bps. Inflation breakevens declined marginally, indicating market expectations of slower inflation ahead.
Looking ahead, the UK economy faces a mix of opportunities and risks. The baseline forecast projects GDP growth stabilizing around 1.20%–1.40% YoY over the next two quarters, supported by resilient consumer spending and gradual easing of supply chain disruptions.
Bullish scenario (20% probability)
- Faster-than-expected inflation decline leads to monetary easing in mid-2026.
- Business investment rebounds sharply amid improved global trade conditions.
- Fiscal stimulus targets infrastructure, boosting growth above 1.80% YoY.
Base scenario (55% probability)
- Growth remains steady near 1.30%, with inflation slowly converging to target.
- Monetary policy stays restrictive but data-driven.
- External risks persist but do not escalate materially.
Bearish scenario (25% probability)
- Geopolitical shocks or energy price spikes trigger recessionary pressures.
- Monetary tightening continues, suppressing consumer and business demand.
- Fiscal austerity deepens, dragging growth below 1.00% YoY.
The UK’s GDP growth rate YoY of 1.30% in November 2025 signals a cautiously optimistic economic environment. While growth has moderated from earlier peaks, it remains above the long-term average, supported by solid labor markets and consumer resilience. Monetary and fiscal policies are calibrated to balance inflation control with growth support, but external shocks and structural challenges persist.
Investors and policymakers should monitor inflation trends, wage dynamics, and geopolitical developments closely. The interplay between tightening financial conditions and fiscal discipline will shape the UK’s growth trajectory in 2026 and beyond.
Data sourced from the Sigmanomics database, cross-verified with official UK ONS releases and Bank of England reports.
Key Markets Likely to React to GDP Growth Rate YoY
The UK GDP growth rate influences a range of financial markets, particularly those sensitive to economic momentum and monetary policy shifts. Below are five tradable symbols with historical correlations to UK GDP movements:
- FTSE100: UK’s primary equity index, closely tracks domestic growth and investor sentiment.
- GBPUSD: The British pound against the US dollar reacts swiftly to GDP surprises affecting monetary policy expectations.
- EURGBP: Euro-to-pound exchange rate reflects relative economic strength within Europe and UK.
- BTCUSD: Bitcoin’s price often moves inversely to risk-off sentiment triggered by weak economic data.
- HSBA: HSBC Holdings, a major UK bank, sensitive to economic growth and interest rate changes.
Indicator vs. FTSE100 Since 2020
A comparative mini-chart analysis shows the UK GDP growth rate YoY and FTSE100 index moving in tandem over the past five years. Periods of GDP acceleration, such as early 2021 and early 2025, coincide with FTSE100 rallies. Conversely, GDP slowdowns align with market corrections, underscoring the index’s sensitivity to economic fundamentals.
FAQs
- What is the current UK GDP Growth Rate YoY?
- The latest UK GDP growth rate YoY is 1.30% as of November 2025, slightly below the 1.40% estimate.
- How does the GDP growth rate affect UK monetary policy?
- GDP growth influences the Bank of England’s interest rate decisions, balancing inflation control with economic expansion.
- What are the main risks to UK GDP growth in 2026?
- Key risks include geopolitical tensions, energy price shocks, and prolonged monetary tightening impacting demand.
Takeaway: The UK economy is expanding moderately but faces a delicate balance between inflation control and growth support amid external uncertainties.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
The November 2025 GDP growth rate of 1.30% YoY compares to 1.40% in September and a 12-month average of 1.10%. The slight dip from the prior month reflects softer export performance and cautious business spending. However, consumer demand and wage growth have provided a steady underpinning.
Historical context shows growth peaked at 1.50% in March 2025 before moderating. The current figure remains well above the 0.70% low in September 2024, indicating resilience despite headwinds.