"Despite the Budget avoiding front loaded tax hikes and borrowing costs set to fall over the coming year, its effects are likely to linger and household sentiment may not improve in the near term. The impact of earlier price shocks combined with rising inflation expectations, has seen households become more cautious.
“The outlook for investment growth is more positive and is set to be driven by both private and public sector activity. Investment in data centres and energy infrastructure, particularly in renewables, could help foster growth over the coming year. While government infrastructure spending is set to ramp up. As a result, we expect investment to remain a key contributor to growth going into 2026.
“UK GDP fell by 0.1% in October, driven by a fall in services and construction output. We expect growth to remain weak for the remainder of Q4, as activity in November is likely to have been constrained because of continued Budget uncertainty. Overall, we expect the GDP growth to be flat in the final quarter of this year.”
