Economic outlook remains subdued

08 Sep 2025

The overall outlook for the UK economy remains subdued despite an upgrade to its forecast, says the British Chambers of Commerce (BCC).

The UK economy is expected to grow by 1.3% in 2025, revised up from the previous forecast of 1.1%, says the BCC.

This upgrade reflects better-than-expected economic performance in Q1, supported by public spending. However, GDP is expected to slow slightly in 2026 to 1.2%, before rising to 1.5% in 2027 – unchanged from the previous forecast. 

Business investment across 2025 is projected to be 1.6% – a significant downgrade from 4.8% in the last forecast, the business group added. 

Vicky Pryce, Chair of the BCC Economic Advisory Council, said: 'While 2025 may be slightly better than forecast, the overall growth landscape for the UK in the next couple of years looks weak. The economy will continue to be buffeted by global headwinds, alongside ongoing worries about high bond yields.  

'Government expenditure has bolstered the economy this year, but the spending taps are likely to be tightened very soon across Whitehall.  

'The spectre of inflation is set to loom over the economy for some time to come, with consumers reluctant to spend. That's likely to slow the path of interest rate cuts.  

'Government long-term strategies are welcome – but firms can't only exist on promises of tomorrow. They need help today to grow, recruit and compete.'