Rachel Reeves is “sleepwalking into disaster”, financial experts have warned, after official data showed GDP grew by just 0.1% in August — confirming the UK is barely scraping forward ahead of next month’s crunch Budget. Figures published by the Office for National Statistics (ONS) on Thursday revealed that GDP increased by a meagre 0.1% in August 2025, following a 0.1% contraction in July (revised down from flat growth) and a 0.4% rise in June.
Over the three months to August, the economy expanded by 0.3% — a marginal improvement on the 0.2% growth recorded in the three months to July. The data, released just six weeks before the Chancellor delivers her Budget on November 26, paints a bleak picture of an economy stuck in neutral. Services output rose 0.4% in the three months to August, but construction edged up only 0.3% while production output fell 0.3%, underscoring the uneven nature of the UK’s recovery.
Katy Eatenton, Mortgage & Protection Specialist at Lifetime Wealth Management, said the figures expose “a state of total stasis”, adding: “The marginal growth we saw in August was wiped out by July’s downward revision. The net result is an economy crawling along with no zest and no energy. And we have the Budget ahead, which has the potential to further impact business. We’re in for an ominous fourth quarter.”
Omer Mehmet, Managing Director at Trinity Finance, said the headline growth number was “basically standing still”.
He stressed: “Growth of 0.1% is treading water, not turning a corner. The economy feels flat on the ground because consumers are stretched, businesses are cautious, and government policy keeps changing direction.
“The construction sector is the clearest warning sign: small gains one month, losses the next, with no momentum. What the UK needs now isn’t spin about green shoots, but real stability, investment and confidence so growth isn’t measured in decimal points.”
Riz Malik, Director at R3 Wealth, warned the UK was “relying on hopes and prayers” ahead of the November 26 Budget, accusing the government of failing to grasp the seriousness of the situation.
He said: “UK plc is relying on hopes and prayers at the moment ahead of the winter Budget. We have high inflation, a weak labour market and GDP results that, if on a school report, would be annotated with ‘See me’. We are sleep-walking into an economic disaster.”
Mr Malik added that the exodus of wealth and investment from the UK had become symbolic of wider malaise: “The quickest way we can make money is to tax Emirates more to take advantage of all those who have had enough, packed their bags and flown out of this mess.”
Ranald Mitchell, Director at Charwin Mortgages, said the pattern of weak growth followed by revisions downward had become depressingly familiar.
He explained: “So, the UK economy grew in August — or at least until September’s revision says otherwise. We’ve seen this film before: a flicker of growth followed by a quiet downgrade the next month. It’s starting to feel like statistical deja vu. Beneath the headline, the story hasn’t changed — the economy’s jogging on the spot and it’s not a great read.”
Andrew Montlake, CEO at Coreco, said the stagnation was already weighing heavily on the housing market.
He said: “This morning’s data shows that the economy, if not quite flatlining, is stagnating. No doubt the government will seize on any growth being a positive, and there is good news on growth in construction and services, but everyone is waiting to see what happens in the November Budget. It’s this uncertainty that’s slowing the housing market.”
The ONS data compounds the pressure on Ms Reeves, who faces a growing fiscal black hole and speculation over looming tax rises and spending cuts.
The IMF this week warned UK inflation could surge to the highest in the G7 through 2025 and 2026, while analysts said the latest GDP figures make the Chancellor’s task even harder.