Today’s growth figures make for familiarly depressing reading. The UK economy grew by just 0.1% in the final quarter of 2025, the same anaemic rate as the previous quarter. Overall the economy grew by 1.3% in 2025. But GDP per head fell for a second consecutive quarter. If you feel poorer, it is because you are.
I think there are three main takeaways from these numbers.
1 - This is Groundhog Day for growth.
As my colleague Kristian Niemietz points outs on this week’s podcast, ‘this is all a bit Groundhog Day’. Every few months we assemble to pore over microscopic changes in GDP, debating whether 0.1% growth constitutes meaningful progress, or how bad a 0.1% shrink is. The very fact that we are having these conversations tells its own story about the scale of Britain’s stagnation. As Looking for Growth have artfully pointed out, we’ve been here too many times before. The economy has been barely above flatlining for too long, but unfortunately it yet to sink in for the majority of our political leadership.
2 - The Government is failing on its own terms
If the anaemic growth isn’t bad enough in itself, the response from the Government makes it yet more depressing.
The Prime Minister celebrated that the economy is ‘heading in the right direction’ which is technically true, in that the overall size of the economy isn’t getting smaller, but completely meaningless at the scales we’re seeing. He also said the economy growing means ‘more money in your pocket’ which is technically and meaningfully false with these figures. GDP per capita, the share of the growth between individual citizens, fell in the second half of 2025.
The Chancellor celebrated being the highest growing economy in the G7 (a low bar) and claimed the government has ‘created the conditions for growth’, another lie.
Both PM and Chancellor acknowledged there is ‘more to do’, which is a colossal understatement and entirely depressing in the context of the rhetoric they were using earlier in their premiership. This was going to be the government of economic growth, we were told. They were going to clear up the mess left by the Tories and boost living standards for all by returning energy and dynamism to Britain. A government that declared growth its “number one mission” is now celebrating 0.1% growth. The bar could hardly be lower.
It is now too late to shift all of the blame on their inheritance, or global factors, too. They have delivered two budgets now, plus a swathe of new regulations, and the impact has been the opposite of what they promised. They should look at these numbers and be spitting with frustration, doubling down on their mission and pledging to go further and faster. As Lord Frost has said today, these figures are an utter failure of government.
3 - There is no growth strategy, anywhere
In private messages to Peter Mandelson, of all places, Wes Streeting has said what we are all thinking: the government has no growth strategy. But does anyone? It doesn’t feel like it. There is a depressing lack of bold, ambitious vision across the political spectrum.
The Tories have made some positive noises, particularly on stamp duty and spending reduction. However, the scale of their ambition doesn’t match what is required to either turn our economy around, or persuade voters that the Tories will do things sufficiently differently to their fourteen years in power to have a meaningful difference. Reform’s economic philosophy remains a huge question mark, to put it lightly. Meanwhile, the Liberal Democrats have made a big pledge to break up the Treasury. Not necessarily a bad idea in itself, but rearranging the stationary in Whitehall only matters if you have a plan to deliver with it.
The bottom line is the choices this government are making are costing the economy. The prescription does not have to be complicated. The tax and spending burden needs to fall. Business tax rises and the Employment Rights Act need to be reversed. Then a serious programme of deregulation and supply-side reform is required to unlock the economy and get Britain growing again.
Unfortunately there remains little suggestion that the government, or any of the parties, have the inclination, let alone the courage and the plan, to take that path. And so we wait for the next quarter, and the next set of dismal figures, and the next round of hollow reassurances from ministers who appear to have mistaken treading water for swimming.
Excellent assessment Callum. The government is failing us. It has no vision for growth, because it doesn’t know what growth is! For them, as it was for successive governments for decades, is a word that in their eyes means an increase in tax take.
They are looking at the dripping tap in the treasury kitchen, and waiting for the flow to start increasing from a trickle.
Instead of which the idiots , should be looking at the reservoir, its pipes and valves and recognise they need to turn the tap on!!
I’ve been writing for months and years on this subject. The government has skin in the game. They require money to SPEND. Just as their citizens do. So you think they would be more proactive, yes?…. Well no! They are completely inactive!
They are hitting the tap over the head and demanding more tax revenue from their reservoir ( that’s us the people) that supplies the water ( I mean money) by overtaxing and overburdening the majority of our money holders.
Our government is just as inept as those gone before.
They not only have skin in the game, they are also the referee and guess what? ….. they write the rules of their own game!!!! And still they can’t see that! Nor can they begin to get it right by rewriting those rules. Because they are blind to that option. Moreover they are deaf too! Not just criticism but helpful pointers from us trying to encourage them.
They are the worst of ignorant incompetent and visionless leaders. Who want the job, in fact demand the job by making false promises and when they get the job they realise the enormity of it all and pretend they have ideas but really have none! They are promoted to the level of incompetence.
But instead of accepting that they double down on their ineptitude. To give us the picture we have. The one u describe above. Hitting the tap demanding more without setting the reservoir and the pipes in a way for it to overflow the treasury with water!….. I mean money!!!!
What’s happening now is our reservoir of money, or is it water??…. Anyway, our reservoir, is made up of all money. And to get growth we need all that money flowing out through us to give the treasury more money.
By increasing the flow and weight of money we get that elusive growth. Because without that increased flow of money no growth can occur.
Growth to them is an increase in tax take. But to us, we need to have our increased revenue ( income) to grow to enable that increase in tax take! Yes we need to earn more first to generate that increase in tax revenue! Voila! To increase tax flow you need your own extra flow to enable that higher tax take! It’s not rocket science at all! It’s plainly and painfully obvious. We need to earn more and SPEND more to give that increase in tax take.
So what else? Well, we need the constant flow of ALL our money via SPENDING it! But hold on? Isn’t all our money in the reservoir? Well, strictly speaking it should be. But, what happens in reality is that, as the tap is turned on, the money flows towards us, and a valve called a Bank decides it’s theirs! To keep hold of it by damming money off in their own reservoir. And other reservoirs are in the way like pension funds, hedge funds and foreign banks and funds. Who also dam off our money so by the time it should flow out the treasury tap nothing much comes out! Despite them frantically turning in the tap and whacking it with a club hammer it’s still only a trickle!
Holding money outside our grasp. Or outside of our economy of us receiving and SPENDING is the reason for that trickle. Not because the money (water) has disappeared! No it’s out there somewhere, someone somewhere has a hold of it but, it’s being held and allowed to be held by those holding it who don’t have to SPEND it to earn from it! They have no incentive to SPEND it. Because guess what!?? If we have to borrow it ( because we don’t get enough) then they hike it to lend it to us so we have to repay them that and more! Do by NOT SPENDING their money they get more and more and more of it! Whilst we who have to SPEND it all to survive need to SPEND and need to get it back. But that cyclical demand is getting ever harder as time goes by because no matter what we do the money NOT BEING SPENT BY THOSE WHO HOLD THE MOST DONT NEED TO SPEND THEIRS!!!!