NIESR Monthly GDP Tracker

Data GDP

Source: NIESR
Source Link: https://niesr.ac.uk/
Frequency: Monthly
Next Release(s): October 16th, 2025 8:00 AM

Latest Updates

GDP grew by 0.0 per cent in July – slightly below our forecast of 0.1 per cent. This comes after the positive surprise of 0.4 per cent growth in June. Limited growth in July reflects a stagnant month for services and a reduction in production activity. The contraction in production was driven by weakness in manufacturing while services exhibited limited growth across sub-sectors.
- As forecast, GDP grew by 0.2 per cent in the three month to July driven by growth in services which offset falling production output. Construction and agriculture also grew in the three months to July.
- July’s mediocre growth outturns are consistent with high-frequency indicators and survey data, which point to continued uncertainty among businesses and uneven momentum across sectors.
- We expect GDP to grow by 0.4 per cent in the third quarter, as we forecast better monthly growth outturns for August and September. However, elevated uncertainty among businesses and households continue to pose downside risks to this forecast.
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The June growth figure pushed GDP growth up to 0.3 per cent in the second quarter of this year. Growth across the second quarter was mixed, with the April correction for brought-forward activity ahead of US tariffs providing a weak start which was followed by a recovery in services but continued contraction in production and construction sectors.
- We expect GDP to grow by 0.5 per cent in the third quarter – a slight upward revision from our early projection of 0.4 per cent last month. Despite this upward revision, elevated uncertainty among businesses and weak private consumption pose downside risks to this forecast. We also think that the Chancellor will have to tighten fiscal policy in the Autumn, and that speculation over such policy changes will weigh on economic activity in the coming months.
- “GDP growth was slightly higher than forecast, recording 0.4 per cent in June owing to stronger-than-expected growth in services and construction. The economy therefore grew by 0.3 per cent in the second quarter. Despite this positive surprise, we expect growth to remain subdued in the third quarter of this year as uncertainty over fiscal policy and international trade continues to weigh on economic activity. As outlined in our recent UK Economic Outlook, the Chancellor must build a substantial fiscal buffer in the Autumn Budget to avoid uncertainty plaguing growth into next year.”
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Monthly GDP fell by 0.1 per cent in May, following a contraction of 0.3 per cent in April, mainly caused by a significant decline in the production and construction sectors.
- Recent indicators suggest the growth outlook remains fragile, with momentum uneven across sectors. Persistent falls in hiring and subdued investment point to ongoing caution among households and businesses.
- Based on the latest survey data and business sentiment, we continue to project GDP growth of 0.2 per cent in the second quarter of 2025. However, fragile demand conditions and persistently weak private investment are likely to limit the strength of growth this year.
- The Chancellor’s fiscal headroom remains limited by historically high levels of public borrowing and debt. Her spending plans now hinge heavily on reviving economic growth, underscoring the urgent need for credible reform to stimulate business investment.
- NIESR: “Today’s growth figure of -0.1 per cent in May following April's contraction indicates that the UK’s economic outlook remains fragile. Failure to implement the planned spending cuts has further eroded the UK's fiscal space and its ability to respond to future shocks. Combined with depressed hiring intentions and strained public finances, growth prospects remain muted in the medium term. With fiscal space increasingly constrained, the Chancellor faces hard trade-offs this autumn budget, having to raise taxes or cut spending to meet her self-imposed rules"
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Monthly GDP fell by 0.3 per cent in April, following a 0.2 per cent growth in March, primarily driven by a very soft growth in the Construction sector that was offset by significant falls in the Services sector.
- Recent indicators suggest the growth outlook is stable, but households and businesses continue to exercise caution due to the enduring effects of past shocks and ongoing cost pressures.
- Based on recent survey data and sentiment indicators, we project GDP will expand 0.3 per cent in the second quarter of 2025. However, subdued demand and slow progress in unlocking private investment are likely to constrain this momentum.
- The greater challenge lies in tackling long-standing weaknesses, such as low productivity, economic inactivity, and underinvestment. To achieve sustained growth, credible reforms are required that enhance the economy’s supply-side capacity.
- NIESR: “Today’s GDP growth reported -0.3 per cent in April, suggesting that increases in employers' NICs and wider cost pressures have weighed on activity. In the wake of the spending review, it is more important than ever that policy remains focused on laying the bedrock such that the UK is able to raise long-run GDP growth.”
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Monthly GDP rose by 0.2% MoM in March, following a 0.5% growth in February, mainly driven by the Services Sector. This brings GDP growth for Q1 2025 to 0.7%.
- Economic fragilities are becoming increasingly pronounced, as rising domestic labour costs and external global trade headwinds clash with weak investment and subdued demand. Purchasing Managers’ Index for all sectors indicates contraction for the first time since October 2023, signalling a broad-based slowdown.
- The NIESR project that GDP will grow by 0.6% and 0.5% in the three months to April and May respectively and 0.4% in Q2 2025.
- Policymakers and the Bank of England face a delicate balancing act in the short term—supporting growth without hindering disinflation progress. Over the long term, fiscal options are limited, making structural reforms and the credibility of long-term growth plans even more crucial.
- NIESR: “The economy displayed strong growth of 0.7 per cent in Q1 of 2025, driven by a front-loaded uptick in exports and economic activity as firms and households sought to hedge against anticipated tariff announcements and hikes in NICs and NLW respectively. However, in the medium term, rising domestic cost pressures, subdued demand, and volatile global trade conditions are weighing on confidence and economic activity. As monetary policy navigates a delicate balance, the need for a credible long-term fiscal strategy is more pressing than ever.”
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Given January and February’s GDP outturns, alongside signals from the Purchasing Managers’ Index and a patchy recovery across sectors, NIESR projects UK GDP to expand by 0.6% in Q1 2025 (three months to March), with growth primarily driven by the Production and Services sectors.
- Monthly GDP growth in February performed better than expected, with output expanding by 0.5 per cent, primarily driven by widespread growth across all sectors. This follows an upward revision from stagnant growth in January and recovery from the flatlined growth in 2024. However, the economy remains on fragile footing against the backdrop of global volatility and domestic headwinds.
- Policy responses must match the scale and complexity of the economic environment. As global volatility intensifies, policies should be anchored in long-term economic growth, investment, and productivity, prioritising resilience over short-term fiscal targets.
- NIESR: “The UK economy expanded by 0.5 per cent in February, surprising but welcome positive news. However, heightened global uncertainty and escalating trade tensions mean the outlook remains uncertain, with a likely reduced growth rate this year due to President Trump's "Liberation Day" announcements. This adds complexity for the Chancellor, who, with limited fiscal headroom already, will face challenging decisions come the autumn.”
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Monthly GDP growth in January signals a cautious start to 2025, contracting by -0.1% MoM following a 0.4% MoM increase in December, primarily driven by a notable slowdown in the Production sector. However, underlying weaknesses persist, with services providing modest support while manufacturing remains under pressure due to weak domestic and external demand.
- NIESR forecasts February and March monthly growth at 0.1% MoM each.
- Given January’s GDP outturn alongside the Purchasing Managers’ Index and recent business and confidence surveys, we project GDP to expand by 0.3% in Q1 2025, with growth primarily driven by the Services sectors.
- The upcoming Spring Statement presents an opportunity to reinforce economic stability rather than introduce further uncertainty. A consistent policy direction will be essential to fostering business confidence, unlocking investment, and supporting long-term growth.
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Monthly GDP rose by 0.4% MoM in December, following a growth of 0.1% MoM in November, mainly driven by the dominant services sector. This brings GDP growth for Q4 2024 to 0.1 QoQ – a modest return to growth after it stalled in the third quarter.
- January 2025 monthly growth is expected at 0.1% MoM and 1.2% YoY with the 3Mo3M rate expected at 0.3% MoM.
- Given the softening in signals from the purchasing managers’ index and recent business and confidence surveys, it will be important to monitor how these sentiments translate into business investment, hiring decisions, and consumer spending patterns as the year continues. We project GDP to grow by 0.4% QoQ in Q1 2025, with growth coming from the Production and Services sectors.
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The NIESR UK Monthly GDP Tracker forecasts December monthly growth of 0.2% MoM and 0.0% for Q4 2024 with services output flat and production output jumping 1.4% MoM.

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