The UK's economic recovery has hit another stumbling block, with official statistics revealing growth was weaker than first thought earlier this year. The Office for National Statistics (ONS) has revised its estimate for the second quarter downwards, painting a picture of a stalling economy as household finances come under severe pressure.
Growth Figures Revised Downwards
On Monday 22 December 2025, the ONS announced it had cut its estimate for UK economic growth in the three months to June. The figure was reduced to 0.2 per cent from an initial estimate of 0.3 per cent. The already sluggish expansion for the third quarter was confirmed at just 0.1 per cent.
Liz McKeown, the ONS's director of economic statistics, stated the updated data confirmed the initial assessment of slowing growth. She highlighted that growth in the vital services sector was "particularly offset by falls in production," noting a marked drop in car manufacturing.
This revision deals a blow to Chancellor Rachel Reeves, whose economic strategy has so far struggled to catalyse stronger growth. The figures follow earlier data showing the economy unexpectedly shrank by 0.1 per cent in October, defying forecasts for modest growth.
Household Incomes and the Cyber Attack Impact
Perhaps more concerning for British families is a sharp decline in spending power. The ONS reported that real household disposable income per head (RHDI) fell by 0.8 per cent in the third quarter. This critical measure, which adjusts for inflation, taxes, and benefits, has now contracted for two of the last three quarters.
The economy was also significantly impacted by a major cyber attack on Jaguar Land Rover in September. Research from the non-profit Cyber Monitoring Centre (CMC) suggests the incident, which halted production, cost the UK around £1.9bn and affected approximately 5,000 organisations through its fallout.
Mounting Pressure and Recession Fears
The combination of weak growth, falling incomes, and sectoral contractions has analysts warning of a looming technical recession, defined as two consecutive quarters of economic decline. Pressure is intensifying on the Bank of England to provide further support.
In a move to stimulate the ailing economy, the Bank cut interest rates to 3.75 per cent just last Thursday, a three-year low. However, with production output shrinking 0.5 per cent in October and construction contracting 0.3 per cent, while the dominant services sector flatlined, the challenge for policymakers remains acute.
The latest data underscores the fragile state of the UK's post-pandemic recovery, with households bearing the brunt of the slowdown as their real incomes continue to fall.
