UK Q4 Economic Growth Falls Short: Key Implications for Investors and Businesses in Oman
London: Britain’s economy grew by just 0.1 percent in the final quarter of 2025, falling short of analyst expectations of 0.2 percent, according to official figures released Thursday by the Office for National Statistics (ONS). The sluggish growth was largely driven by a significant decline in the crucial services sector.
This disappointing economic data comes amid increasing scrutiny of Prime Minister Keir Starmer, who has recently faced calls to resign following controversy over his appointment of Peter Mandelson as UK ambassador to the US, despite Mandelson’s known connections to convicted sex offender Jeffrey Epstein.
Since winning the general election in July 2024, Starmer’s Labour government has struggled to stimulate the flagging economy, having implemented tax increases in two consecutive budgets. Overall, the UK economy expanded by 1.3 percent in 2025, a slight improvement from the 1.1 percent growth recorded in 2024.
The economy also continued to feel the effects of trade tensions triggered by former US President Donald Trump’s tariff policies. Although Trump has since scaled back his most aggressive tariff threats, lingering uncertainties have caused many British businesses to delay major investment decisions.
Last week, the Bank of England downgraded its economic growth forecasts, now projecting GDP growth of 0.9 percent in 2026 and 1.5 percent in 2027, down from previous estimates of 1.3 percent and 1.6 percent, respectively. The central bank maintained its benchmark interest rate at 3.75 percent, citing ongoing inflationary pressures above its two-percent target.
— AFP
Special Analysis by Omanet | Navigate Oman’s Market
The UK’s sluggish economic growth and ongoing political instability signal increased uncertainty for businesses engaged in or dependent on UK markets. For Omani investors, this creates both risks around trade and investment in the UK and opportunities to diversify into more stable or emerging markets. Smart entrepreneurs should monitor evolving trade policies closely and consider hedging against geopolitical risks while exploring alternative partnerships beyond the UK.
