Rachel Reeves ‘sleepwalking into disaster’ after dire GDP figures | Politics | News
Financial experts have warned that Rachel Reeves is “sleepwalking towards disaster” after official data showed GDP grew by just 0.1% in August. Figures published by the Office for National Statistics (ONS) on Thursday revealed that GDP rose a weak 0.1% in August 2025, following a 0.1% contraction in July (revised downwards from flat growth) and a 0.4% increase in June.
The economy grew 0.3% in the three months to August; A marginal improvement compared to the 0.2% growth recorded in the three months to July. The data, released just six weeks before the Chancellor announces his Budget on 26 November, paints a bleak picture of an economy that remains neutral. Services output rose 0.4% in the three months to August, but construction rose just 0.3% while manufacturing output fell 0.3%; this has highlighted the uneven nature of the UK recovery.
Katy Eatenton, Mortgage and Protection Specialist at Lifetime Wealth Management, said the figures revealed a “state of complete stagnation”, adding: “The marginal growth we saw in August was wiped out by the downward revision in July. The net result is that the economy drags on, lacking in joy and energy. And we have the Budget ahead of us, which has the potential to impact things even further. We’re looking at an ominous fourth quarter.” “We are entering.”
Trinity Finance General Manager Ömer Mehmet said the growth figure was “basically stable”.
He emphasized: “Growth of 0.1% is treading water, not turning a corner. The economy feels on flat ground as consumers are nervous, businesses are cautious and government policy continues to shift direction.”
“The construction sector is the clearest warning sign: small gains one month, losses the next, no momentum at all. What the UK needs now is not a spin on green shoots, but real stability, investment and confidence so growth is not measured in decimal points.”
R3 Wealth Director Riz Malik warned that the UK was “relying on hopes and prayers” ahead of the 26 November Budget and accused the government of failing to grasp the seriousness of the situation.
He said: “UK plc is relying on hopes and prayers ahead of the winter budget. We have high inflation, a weak labor market and GDP results that will include ‘See me’ in the school report. We are sleepwalking towards economic disaster.”
Mr Malik added that the flight of wealth and investment from Britain had become a symbol of wider malaise: “The quickest way for us to make money is to tax Emirates more to take advantage of everyone who has enough money, packs their bags and flies away from this mess.”
Charwin Mortgages Director Ranald Mitchell said the weak growth pattern followed by downward revisions felt depressingly familiar.
He explained: “So the UK economy grew in August – or at least until the September revision said otherwise. We’ve seen this movie before: slight growth the next month, followed by a quiet decline. It’s starting to feel like statistical deja vu. Under the hood, the story hasn’t changed; the economy is on track, and that doesn’t read well.”
Coreco CEO Andrew Montlake said the recession was already taking a heavy toll on the housing market.
He said: “This morning’s data shows the economy is stagnating, if not outright stagnating. There is no doubt that the government will view any growth as 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 is this uncertainty that is slowing down the housing market.”
The ONS data increases pressure on Ms Reeves, who faces a growing fiscal black hole and speculation about looming tax rises and spending cuts.
The IMF this week warned that UK inflation could rise to the highest level in the G7 by 2025 and 2026, while analysts said the latest GDP figures made the Chancellor’s task even more difficult.
