“Renewed uncertainty has emerged as a risk to the growth outlook this year. To avoid hindering economic growth momentum, households and businesses need stable foundations and policy clarity.
“Consumer spending increased by 0.2% in Q4 2025. Modest growth in consumer spending is anticipated this year, supported by falling costs. Household energy bills are expected to ease from April onwards, while food price inflation is also projected to decline gradually this year. Borrowing costs should also fall further, with the Bank of England likely to cut interest rates three times this year. This may lead to a more sustained recovery in household sentiment once policy uncertainty is cleared.
"The UK economy grew by 0.1% in Q4 2025, with growth driven by an increase in consumer and government spending. Despite the uncertainties, activity appears to have accelerated in Q1 2026, with forward‑looking indicators suggesting that momentum will continue to strengthen. Overall, we forecast the UK economy to grow by 1% in 2026.”
-ENDS-
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