Britain has slipped into what the TaxPayers’ Alliance describes as a “personal recession,” according to the campaign group’s examination of the latest gross domestic product (GDP) figures.
Analysis of Office for National Statistics data reveals that while the broader economy expanded marginally by 0.1 per cent during both the third and fourth quarters of 2025, individual prosperity moved in the opposite direction.
GDP per capita contracted by 0.1 per cent across both periods, meaning the average person’s share of economic output shrank even as aggregate growth remained positive.
The TaxPayers’ Alliance defines a personal recession as two consecutive quarters where GDP per capita declines, irrespective of how the overall economy performs.
New analysis suggests Britons are trapped in a ‘personal recession’?
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GETTY
Britain last experienced such conditions in 2023, though preliminary figures for 2025 had initially suggested another personal recession before subsequent revisions showed marginal improvements.
The latest ONS data paints a stark picture: annual economic growth reached 1.3 per cent for 2025 as a whole, falling short of Office for Budget Responsibility (OBR) projections made in November.
Manufacturing provided some brightness, driving a 1.2 per cent expansion in the production sector during the final three months.
How has GDP changed in recent years? | ONS
Are Britons experiencing a ‘personal recession’?
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TAXPAYERS ALLIANCE
However, services remained flat while construction contracted by 2.1 per cent. Lord Frost, who serves as Director General of the Institute of Economic Affairs, offered a damning assessment of ministerial efforts to boost the economy.
He said: “Whatever the Government’s growth strategy may be, it isn’t working. The economy has virtually stalled since the spring. And GDP per head is falling again: if you feel poorer, it’s because you are.”
Lord Frost characterised the situation as “an utter failure” for an administration that has made growth its central priority.
The peer urged ministers to reverse course immediately, abandoning what he termed “growth-damaging measures” such as business tax increases and the Employment Rights Act.
Rachel Reeves has made economic growth central her her agenda
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GETTYHe called for reduced taxation, lower public spending, and sweeping deregulation to revive the economy.
The TaxPayers’ Alliance is demanding that ministers give GDP per capita equal weight alongside headline growth figures when formulating policy.
Furthermore, the group has outlined specific measures to ease pressure on taxpayers during personal recessions, including caps on benefit rises, comprehensive departmental spending reviews, reforms to visa categories favouring higher-skilled migrants, and a freeze on public sector wages.
Darwin Friend, the organisation’s research director, said: “If living standards truly are falling again, it would be an unforgivable failing from this government.” He accused ministers of burdening businesses with excessive taxes and regulations despite narrowly avoiding a personal recession the previous year.