Ryan FowlerUK gross domestic product (GDP) rose by 0.3% in the second quarter of 2025, slowing from 0.7% growth in the first quarter, according to the Office for National Statistics (ONS). Compared with the same quarter a year ago, GDP was up by 1.2%.
Growth was supported by a 0.4% rise in services output and a 1.2% increase in construction activity, while the production sector contracted by 0.3%. Real GDP per head grew by 0.2% over the quarter and was 0.7% higher than a year earlier.
The ONS said some economic activity had been brought forward to February and March ahead of changes to stamp duty in April and announced US tariff changes. Within services, information and communication was the largest contributor to growth, up 2.0%, while wholesale and retail trade fell 0.9%. Construction growth was led by infrastructure new work, which increased by 3.2%.
On the expenditure side, growth was driven by higher government consumption and changes in inventories, partly offset by a 1.1% fall in gross fixed capital formation. Business investment dropped by 4.0%. Export volumes rose by 1.6%, supported by a 3.0% increase in services exports, while import volumes increased by 1.4%.
Nominal GDP rose by 0.8% in the quarter and was 5.3% higher than a year earlier. Growth was mainly driven by a 1.3% increase in compensation of employees, including a 0.9% rise in wages and salaries.
Hannah Goldstraw, senior consultant at Barrow Mount Recruitment, said: “While the headline GDP figure still shows growth, the slowdown and drop in business investment are clear warning signs.
“Employers in sectors like construction and infrastructure are holding steady, but others are becoming more cautious.
“For recruitment, this means some areas will see sustained demand, while others may experience longer decision times and tighter hiring budgets.”
