Britain’s economy has shown resilience, with global professional services firm PricewaterhouseCoopers (PwC) raising its 2025 growth projection to 1.3 per cent, marking an increase from its earlier estimate of 1.1 per cent.
The accounting firm’s economists pointed to a robust start to the year as the reason for the upgrade.
The first quarter delivered 0.7 per cent expansion, followed by 0.3 per cent growth in the subsequent three months.
This performance exceeded initial expectations and prompted the upward revision, and the PwC described the economy as “subdued but not stalling,” noting continued momentum despite challenges.
The assessment indicates Britain has avoided contraction while growth remains modest.
Government expenditure emerged as the main driver of growth, with healthcare investment and consumption providing crucial support during the second quarter.
This activity offset underlying weakness in the private sector where business investment contracted, as companies grappled with uncertainty and rising costs.
The corporate sector’s reluctance to commit capital might reflect wider concerns about the economic trajectory ahead of Rachel Reeves’ autumn budget announcement.
The accounting firm’s economists pointed to a robust start to the year as the reason for the upgrade
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Consumer spending showed moderation, but performed better than expected as households demonstrated restraint without cutting back dramatically.
PwC’s analysis found Government intervention effectively propped up GDP figures.
The firm suggested state spending “flattered” growth statistics when private sector activity slowed.
This reliance highlighted fragility beneath the headline numbers.
Economists warned that sustainable growth may be difficult to achieve without greater private sector involvement.
UK growth slowed to 0.3% in the summer
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ONSHe warned that the route back to target may be uneven, with wage growth and domestic cost pressures increasingly shaping the inflation outlook.
Mr Kupelian also noted that consumer spending had held up better than expected, adding another layer of complexity to the policy response.
He said that growth remains subdued but has not stalled entirely. “The UK economy continues to tread water, with GDP growth flatlining but avoiding outright contraction,” he said.
He highlighted emerging weakness in investment and housing, noting: “Consumer spending has held up better than expected, although higher interest rates are now feeding through more clearly into investment and housing.”
PwC’s latest research underscored the need for stronger private sector momentum.
“A lasting recovery will require household spending and private sector activity to pick up,” the firm said.
Economists expect UK GDP to grow by 1.2 per cent in 2026, with scope to reach 1.6 per cent if households cut back on saving and boost consumption.
PwC said the outlook reflects “gradual change rather than dramatic shifts,” suggesting the economy is stabilising rather than accelerating.