The Office for National Statistics (ONS) has revised the UK’s economic growth for the second quarter down to 0.2% from 0.3%, while GDP growth for Q3 was left unchanged at 0.1%. The report notes that real household disposable income per head fell by 0.8% in the third quarter, with this coming after zero growth in the second quarter and a contraction of 0.9% in the first three months of 2025. Liz McKeown, director of economic statistics at the ONS, said the updated figures “paint the same picture as our initial estimate, with growth continuing to slow in the third quarter.” Matt Swannell, chief economic adviser to the EY Item Club, commented: “Given that fiscal policy is tightening and the effects of borrowers refinancing cheap fixed-rate mortgages will more than offset cuts to bank rate, another year of sluggish growth for the UK economy is expected in 2026.” Alex Kerr, UK economist at Capital Economics, expects to see the economy grow by 1% in 2026, down from 1.4% this year.

Business confidence in the UK increased by 10 points by the end of 2025, according to Lloyds Banking Group’s Business Barometer. This rise followed the Budget, which eased concerns over potential tax hikes. Despite this optimism, 84% of business leaders remain worried about future tax increases. Hiring plans are still on hold, with only 17% of firms looking to expand their workforce. Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, noted a significant boost in the construction sector, which rose to 61%, despite ongoing challenges in commercial property development.

More than half of British businesses are struggling to grow their sales in Europe, according to a British Chambers of Commerce (BCC) survey. The report found that 54% of exporters believe the trade and co-operation agreement with the EU has not aided their sales, a 13% increase from last year. Steve Lynch, director of international trade at the BCC, said: “Getting the EU reset right is now a strategic necessity, not a political choice.” The BCC has recommended measures to improve trade, including customs simplification and better co-operation on VAT.

Despite rising unemployment, demand for IT and tech professionals in the UK is increasing. A report by recruitment firm Robert Half reveals that 56% of businesses plan to expand their tech teams in H1 2026.

A House of Lords committee has urged the Government to use tax breaks to encourage over-60s to stay in or return to work, warning that Britain is unprepared for an ageing population and a shrinking workforce. With over-65s expected to make up 27% of the population by 2074, the Economic Affairs Committee report says targeted tax incentives and the removal of “cliff edges” in pension and tax rules could ease pressure on public finances and the state pension bill by boosting older-age employment. The committee argues this approach would be more effective than further raising the state pension age and points to European examples, such as Germany and Denmark, where tax incentives for pensioners who keep working have helped draw older people back into the labour market.

Household disposable income in the UK has fallen to its lowest level since before the pandemic, largely due to sharp tax increases. Real household disposable income (RHDI) per person fell by 0.8% in the three months to September and now sits below its pre-pandemic level, despite rising wages. The Office for National Statistics (ONS) attributes the decline primarily to a £6bn rise in taxes in the quarter – the second-largest tax increase on record. This includes higher capital gains taxes and the freeze on income tax thresholds. Although wages and salaries rose by £3.5bn, this gain was more than offset by higher taxes on income and wealth. The Chancellor’s decision to extend the threshold freeze is expected to pull an additional 920,000 people into the 40% tax rate, with nearly 9m paying higher-rate tax by the early 2030s. Martin Beck at WPI Strategy said the ONS figures “highlight the corrosive impact of the prolonged freeze in income tax thresholds.”

The Competition and Markets Authority (CMA) has warned that motorists may be overpaying for fuel due to persistently high profit margins. In its annual road fuel monitoring report, the CMA found that rising margins cannot be justified by increased operating costs. The CMA said that while lower oil prices mean fuel prices had fallen “significantly” since it last studied the issue in 2023, profit margins on fuel for both supermarket and non-supermarket retailers were “historically high.”

More than half of Britons plan to buy fewer Christmas presents this year due to rising household costs, according to a Savanta poll. The survey of 2,158 adults revealed that 51% have reduced their gift purchases. Additionally, 37% intend to host fewer guests, while 25% will stay home to save money. Meanwhile, separate data from PwC suggests that Britons are expected to spend £24.6bn on Christmas this year, representing a year-on-year increase of 3.5%. This will be driven by inflation, rather than an increase in purchases. PwC forecasts that average spending per adult over Christmas will rise from £449 to £461. Food and drink will be the top spending priority, with 27% of consumers planning to spend more this Christmas compared to 2024.