Slow growth creates challenges, but the Chancellor must see the Budget as an opportunity
Professor Joe Nellis November 13th 2025
Professor Joe Nellis is economic adviser at MHA, the accountancy and advisory firm.
The UK economy grew by only 0.1% in Q3, confirming that Britain remains stuck in a pattern of stable but low growth. After a strong rise in GDP of 0.7% in Q1, momentum has slowed. Services kept the economy moving but falls in manufacturing and construction dragged overall output down — a stark sign of fragility beneath the surface.
Consumers remain cautious, with the household savings ratio remaining high, and their spending power eroded by stubborn prices and high borrowing costs. Inflation, though stable at 3.8% for the past three months, is still biting hard.
Businesses are holding back too - investment plans have been shelved amid political uncertainty, sluggish global trade, and doubts over when the Bank of England will finally ease policy. Exports tell a familiar story: digital and financial services remain resilient, but goods shipments continue to weaken as global demand cools and post-Brexit frictions persist.
The picture is one of an economy progressing slowly, with productivity flat (and expected to be downgraded by the Office for Budget Responsibility) and unemployment creeping upwards. Wage growth is slowing but still running ahead of productivity, leaving the Bank of England wary of declaring victory over inflation. Meanwhile, the fiscal position has deteriorated: borrowing is higher than forecast and debt-interest payments continue to eat into the government’s room for manoeuvre.
"The UK economy grew by only 0.1% in Q3, confirming that Britain remains stuck in a pattern of stable but low growth."
Professor Joe Nellis, Economic Adviser at MHA
Does this set the stage for a make-or-break Budget?
It is important to remember that the UK is not alone in its economic slumber, as all major economies in the Western world are struggling against structural issues in the global economy, and the UK is in fact set to grow faster this year than many of its G7 counterparts. Given this, could it be argued that the issues we face are simply unsolvable by one Chancellor in one Budget?
Possibly, but what the Chancellor announces on 26th November does matter to struggling households and business across the country. Looking into 2026, inflation should begin to ease, interest rates will be cut, household spending could slowly recover, and businesses may begin to see the benefits of investments in productivity-boosting technology. If the Chancellor can provide a credible plan to reignite growth, attract investment and rebuild confidence, the outlook for the UK economy could be brighter than the naysayers will admit.
"If the Chancellor can provide a credible plan to reignite growth, attract investment, and rebuild confidence, the outlook for the UK economy could be brighter than the naysayers will admit."
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