Starmer chaos is ‘derailing’ UK as Rachel Reeves plans in tatters after gradual development
The UK economy grew by just 0.1% in the final three months of 2025, missing expectations as services sector remains flat
It’s been a rough time for Starmer(Image: WPA Pool, Getty Images)
The UK economy experienced modest growth in the fourth quarter of 2025, falling slightly short of forecasts as an anticipated lift from the services sector didn’t materialise . . . and the recent chaos surrounding Keir Starmer has a lot to do with it.
The latest data from the Office for National Statistics (ONS) revealed the economy grew a tepid 0.1% in the three months to December 2025. A survey of City economists by Bloomberg had anticipated 0.2% growth for the fourth quarter.
This occurred as the services sector, typically regarded as the powerhouse of the economy due to its substantial contribution of over 80% to GDP, recorded no growth during this period. Production output rose 1.2% whilst construction declined 2.1%, as reported by City AM.
“The economy continued to grow slowly in the last three months of the year, with the growth rate unchanged from the previous quarter,” Liz McKeown, director of economic statistics at the ONS, said.
“The often-dominant services sector showed no growth, with the main driver instead coming from manufacturing.”
McKeown noted that construction posted its poorest performance in more than four years. The Chancellor also received another significant setback in the monthly figures, with November’s growth downgraded to 0.2% from the original estimate of 0.3%. The economy’s 0.1% decline in October remained unchanged.
In December – the first month following Reeves’ Budget – the economy grew 0.1%. “A long list of data revisions from the ONS has revealed the UK economy barely kept its head above water in the final quarter of last year,” said Lindsay James, investment strategist at Quilter.
“We should now be reaching a place where peak uncertainty is behind us, and businesses are better able to plan for the post budget and post trade deal world. However, the well flagged leadership challenge – which headlines would have us believe is fast becoming a case of when rather than if – risks derailing that.”
A rise in economic activity had been predicted by analysts after numerous surveys in the final quarter indicated that firms had delayed their investment strategies until questions surrounding public finances were resolved.
Reeves had been anticipated to confront a severe fiscal shortfall following a productivity downgrade. However, the Office for Budget Responsibility’s economic forecast would subsequently demonstrate that a spike in tax revenues – driven primarily by inflation – more than compensated for the £16bn downgrade.
Nevertheless, Reeves implemented tax increases totalling £26bn in the Budget, although companies managed to alleviate some of their gravest concerns.
The elimination of certain fiscal uncertainties had been predicted by economists to trigger increased activity following the November Budget. A poll by the Institute of Directors (IoD) ahead of the Budget revealed that private sector optimism has plummeted to its lowest level since the industry body began gathering data ten years ago, amid escalating speculation about taxes.
Responding to these new figures, shadow Chancellor Mel Stride said: “These disappointing statistics show a Downing Street and a Treasury that have taken their eye off the ball.
“Wes Streeting is correct in stating that Labour lacks a ‘growth strategy’. They are distracted by scandals of their own creation as Keir Starmer’s authority dwindles.”
Chancellor Rachel Reeves stated: “Thanks to the choices we have made, we’ve seen six interest rate cuts since the election, inflation falling faster than predicted and ours is the fastest growing G7 economy in Europe.
“The Government has the right economic plan to build a stronger and more secure economy, reducing the cost of living, cutting the national debt and creating conditions for growth and investment across the country.”
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