UK Economy Edges Up by 0.1% in Q4 2025; OECD Slashing 2026 Growth Forecast Amid Record Inflation Spike

The UK's GDP grew by a marginal 0.1% in the final quarter of 2025, according to the Office for National Statistics (ONS). This stagnant performance aligns with a sharp downgrade from the OECD, which cut Britain’s 2026 growth forecast by 0.5 percentage points to just 0.7%—the largest reduction among major economies.

The OECD also significantly revised its 2026 inflation outlook for the UK, raising it to 4%, driven by soaring energy prices and fiscal tightening. Consequently, the Bank of England is expected to hold interest rates steady throughout 2026, with the first potential cuts not anticipated until Q1 2027 as inflation slowly retreats toward the 2% target.