UK Preliminary GDP increases by 0.1% QoQ in Q4 2025 vs. 0.2% expected
The UK economy expanded at a quarterly rate of 0.1% in the three months to December 2025, following a 0.1% growth in the third quarter (Q3).
The data missed the market forecast of 0.2% in the reported period.
The UK GDP rose 1.0% year-over-year (YoY) in Q4 2025 vs. 1.2% expected and a 1.2% growth in Q3 (revised from 1.3%).
The monthly UK GDP arrived at 0.1% in December, compared to 0.2% in November (revised from 0.3%), in line with the market consensus.
Other data from the UK showed that Industrial Production and Manufacturing Production declined 0.9% and 0.5%, respectively, over the month in December. Both readings missed market expectations.
Market reaction to the UK data
The Pound Sterling edges slightly lower in an immediate reaction to the UK GDP data. At the press time, the GBP/USD pair is down 0.03% on the day to trade at 1.3615.
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.04% | -0.02% | 0.07% | 0.10% | -0.05% | 0.07% | |
| EUR | -0.06% | -0.02% | -0.07% | 0.01% | 0.04% | -0.11% | 0.01% | |
| GBP | -0.04% | 0.02% | -0.06% | 0.03% | 0.06% | -0.09% | 0.04% | |
| JPY | 0.02% | 0.07% | 0.06% | 0.07% | 0.11% | -0.07% | 0.08% | |
| CAD | -0.07% | -0.01% | -0.03% | -0.07% | 0.04% | -0.13% | 0.00% | |
| AUD | -0.10% | -0.04% | -0.06% | -0.11% | -0.04% | -0.15% | -0.00% | |
| NZD | 0.05% | 0.11% | 0.09% | 0.07% | 0.13% | 0.15% | 0.12% | |
| CHF | -0.07% | -0.01% | -0.04% | -0.08% | -0.00% | 0.00% | -0.12% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
This section below was published at 05:15 GMT on Thursday as a preview of the UK GDP data
- UK GDP is forecast to have eased a tad YoY in Q4 2025.
- The BoE expects the economy to expand by 0.9% in 2026.
- GBP/USD seems to have met firm resistance near 1.3900.
Markets will be watching closely on Thursday, when the United Kingdom’s (UK) Office for National Statistics (ONS) will release the advance estimate of Q4 Gross Domestic Product (GDP).
If the data land in line with consensus, the UK economy would have continued to grow at an annualised pace of 1.2%, compared with 1.3% recorded the previous year. If forecasts match, it would suggest a steady but uninspiring outcome, hinting that momentum is starting to level off. On a QoQ basis, GDP is expected to show a modest expansion of 0.2%, slightly above the 0.1% in Q3, reinforcing the idea of an economy still growing, but doing so with less energy.
The Bank of England’s (BoE) Monetary Policy Committee (MPC) expressed a slightly more optimistic outlook, projecting growth of approximately 1.5% for the entire year.
That said, the policy outlook remains finely balanced. Given the cooling labour market and slowing domestic inflation, markets anticipate a further 25 basis point rate cut from the ‘Old Lady’ at its March 19 meeting, provided that incoming data continues to support this view.
Projections for the UK GDP
The ONS reported that the UK economy grew by 0.1% QoQ in Q3 2025, matching the previous quarter’s prints. On a monthly basis, GDP grew by a healthier 0.3% in November, but momentum is expected to fade again, with output seen rising by only 0.1% in the final month of 2025.
The BoE’s latest meeting echoed the softer tone. Policymakers have downgraded their growth outlook and now expect GDP to expand by 0.2% in Q4 2025, up from a flat reading previously pencilled in for December but still pointing to a very subdued end to the year.
Inflation remains the more uncomfortable part of the picture. The UK maintains its leading position in the inflation league table among its major peers. The latest ONS data showed headline Consumer Price Index (CPI) inflation rising to 3.4% YoY in December. Core CPI eased only marginally to 3.2% YoY, while services inflation remained stubbornly high at 4.5%, underlining why policymakers remain cautious despite the clear loss of growth momentum.
When will the UK release Q3 GDP, and how could it affect GBP/USD?
The UK will release the preliminary Q4 2025 Gross Domestic Product (GDP) on Thursday at 7:00 GMT.
Pablo Piovano, Senior Analyst at FXStreet, says, “GBP/USD appears to have met some decent resistance at the 2026 ceiling at 1.3868 (January 27).”
“If bulls push harder, Cable could challenge the minor hurdle at the 1.3900 round level, ahead of the July 2021 peak at 1.3983 (July 21) and the weekly high at 1.4001 (June 23, 2021),” Piovano adds.
“On the flip side, the loss of the February base at 1.3508 (February 6) could see the interim 55-day SMA at 1.3455 retested, closely followed by the significant 200-day SMA at 1.3429,” he concludes.
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
Author
FXStreet Team
FXStreet
