GDP figures: Government reaction and other responses

HM Treasury spokesperson responses to ONS GDP statistics in the three months to August.

An HM Treasury spokesperson said: 

“ We have seen the fastest growth in the G7 since the start of the year, but for too many people our economy feels stuck. Working day in, day out without getting ahead.  

“The Chancellor is determined to turn this around by helping businesses in every town and high street grow, investing in infrastructure and cutting red tape to get Britain building.

CBI Responds to latest GDP data 

Ben Jones, CBI Lead Economist, said: 

“Today's figures confirm that growth over the summer was slower than during the first half of the year. Activity remains patchy across sectors, with many businesses reporting subdued demand and higher operating costs. And firms are choosing to sit tight on hiring and investment until there's more clarity on the policy outlook. 

“The Budget provides a critical opportunity for the government to reaffirm its commitment to growth. Going further on planning reform is a positive first step and firms will be looking for further supportive interventions on November 26th. This includes delivering the strategic reforms required to simplify the tax system, positioning business to invest in the skills they need through a fully flexible Growth and Skills Levy and exploring further measures to address the UK's high energy costs.” 

British Chambers of Commerce

Responding to the latest GDP data published this morning, Stuart Morrison, Research Manager at the British Chambers of Commerce said:  

“Today's data shows the economy picking up slightly, driven by services and construction. That will be welcomed by business, ahead of what is expected to be a challenging Budget next month.   

“However, growth of 0.3% in the three months to August, and 0.1% in the month itself, won't settle the long-standing concerns of the firms we represent.    

“Our latest survey shows business confidence and investment levels continue to suffer. A fifth of firms are expecting lower turnover over the next year, and a quarter have scaled back investment plans.  

“For the last twelve months, SMEs have told us the same story: rising costs, weak investment, and little sense of relief on the horizon.  

“All eyes will be on the Chancellor's make-or-break Budget next month. Our message is simple – no more taxes on business. Growth will only improve if business confidence improves, and that won't happen if more cost pressures are piled on firms. The Chancellor must also use her statement to tackle the skills crisis, support exports and turbocharge infrastructure projects.” 

TUC: To protect the progress in fixing the economy we need a “serious conversation about tax”   

Commenting on GDP figures showing growth of 0.1% for August 2025, and of 0.3% in the three months to August 2025, TUC General Secretary Paul Nowak said:  

“Fixing the economy won't happen overnight – especially after years of Tory failure and growing global uncertainty.   

“But this government is getting us back on track - prioritising workers' living standards and ensuring much-needed investment in our public services and infrastructure.  

“Now we've got to protect that progress. This should include a serious conversation about tax.  

“It's time the banks, betting giants and super-rich paid their fair share so we can build an economy that works for everyone.  

“If we want to protect spending on our high streets, and see better hospitals, schools and transport – the basics that keep Britain running – then those with the broadest shoulders need to pull their weight." 

Conservatives sound the alarm Labour's on flatlining economic growth

The Conservatives are today [16^th of October] sounding the alarm on Rachel Reeves's economic doom loop as new figures reveal Labour's lack of plan and backbone has led to flatlining economic growth.

Data from the Office for National Statistics has confirmed the economy grew by 0.1 per cent in August 2025 following a fall of 0.1 per cent in July 2025.

With inflation rising, unemployment up and borrowing out of control, the growth figures cannot conceal the true state of the economy and the public finances.

Warning that Labour's tax rises have already done untold damage, Chancellor Sir Mel Stride has urged Rachel Reeves not to consider any further hikes in her upcoming Budget.

Sir Mel Stride MP, Shadow Chancellor of the Exchequer, said:

‘ONS figures this morning show that growth continues to be weak and Rachel Reeves is now admitting she is going to hike taxes yet again, despite all her promises.  

“If Labour had a plan – or a backbone – they would get spending under control, cut the deficit and get taxes down, as the Conservatives have set out with our £47bn savings plan.

“Instead they are going to hit a fragile economy with more damaging tax rises.   Only the Conservatives have a plan for a stronger economy, and the leadership needed to deliver it.”

ENDS

Notes to editors:

Britain is trapped in an economic ‘doom loop' – as Rachel Reeves admits:

• Rachel Reeves has admitted that Britain is in an economic ‘doom loop'. STUDIO: ‘Can you promise the British people you're not going to get stuck in a doom loop of having to go through this cycle every year of having to find more tax to fill the black hole?' REEVES: ‘I think nobody wants that cycle to end more than I do, Sam' (Sky News, 15 October 2025, archived).

Rachel Reeves' choices put Britain in that ‘doom loop':

• Labour have increased taxes to a ‘historic high' and introduced a Jobs Tax. Rachel Reeves raised taxes by £40 billion a year in her first Budget, having only set out £7 billion in manifesto tax plans. After this, the Office for Budget Responsibility (OBR) said taxes would rise from 35.3 per cent of GDP to a ‘historic high' of 37.7 per cent in 2027-28. [OBR, Economic and Fiscal Outlook, 26 March 2025, link; The Labour Party, Labour's fiscal plan, 13 June 2024, link]

• Labour have increased borrowing to the highest level since 2010 outside the pandemic, meaning annual debt interest payments are forecast to be £100 billion. Despite promising not to ‘fiddle the figures', in the Autumn, Rachel Reeves announced a new fiscal rule meaning borrowing is expected to reach 96.1 per cent of GDP by 2029-30 - the highest level seen outside the pandemic since 2010 - with annual debt interest payments forecast to be £100 billion. [^[2] OBR, Economic and Fiscal Outlook, 26 March 2025, link; HM Treasury, Autumn Budget 2024, 30 October 2024, link; Bloomberg, 3 November 2023, link; Philip Aldrick, Twitter, 3 August 2024, link.]

• Because of this, economic growth has halved, inflation has doubled and 150,000 have been pushed into unemployment since the Jobs Tax – creating a blackhole in the public finances. Since Rachel Reeves' Autumn Budget, GDP growth has halved from 0.7 to 0.3 per cent, inflation has surged to 3.8 per cent and 152,000 people have lost their jobs, meaning that the Office for Budget Responsibility are expected to downgrade growth and productivity forecasts – creating a blackhole in the public finances. [^[3] ONS, GDP quarterly national accounts, UK: April to June 2025, 30 September 2025, link; ONS, Consumer Price Index, 17 September 2025, link; ONS, Earnings and employment from Pay As You Earn Real Time Information, 16 September 2025, link.]

However, Rachel Reeves admitted she plans to raise taxes once again – meaning Britain's doom loop will continue under Labour:

• Rachel Reeves has admitted that further tax rises are coming. STUDIO: ‘But you agree, yes, there are tax rises coming down the track' REEVES: ‘I was really clear during the general election campaign and we discussed this many times, I would always make sure that the numbers add up. And of course challenges are being thrown our way, but I won't duck those challenges. Of course we're looking at tax and spending as well, but the numbers will always add up with me as Chancellor' (Sky News, 15 October 2025, archived).

IoD: Construction challenges threaten UK's growth ambitions

Commenting on ONS data that showed GDP showed growth of 0.1% in August 2025, following revised growth of -0.1% in July, Anna Leach, Chief Economist at the Institute of Directors, said:

“At headline level, the economy held up reasonably well over the summer, with steadier growth replacing the tariff-driven momentum seen earlier in the year. But the underlying picture is more mixed. Consumer services picked up slightly in August, helped by retail, yet the three-month trend remains negative as households see real income gains eroded by persistent inflation and weak confidence ahead of the Budget. Manufacturing output, meanwhile, remains flat and volatile, reflecting the pressure of a challenging global environment, alongside domestically-driven cost pressures.

“The underlying trends in construction are particularly worrying. The sector is already contending with acute skills shortages, rising costs and long delays at the Building Safety Regulator. Added uncertainty over potential housing tax changes in the forthcoming Budget is further weighing on housing demand. Unlocking infrastructure and housing delivery is critical to the UK's growth future. The Budget must tackle systemic barriers head-on - accelerating planning reform, strengthening skills support, alleviating cost pressures and delivering long-term stability for the industry.”