London, November 28, 2025
The Office for Budget Responsibility (OBR) has revised the UK economic growth outlook, projecting a peak real GDP growth of 1.5% in 2025, followed by a moderated annual growth rate around 1.4% from 2026 onwards, reflecting a cautious outlook amid fiscal and economic challenges.
The latest economic and fiscal forecast from the OBR signals a slight downward revision to growth expectations for the UK beyond next year. While the 2025 growth projection has been revised upward to 1.5%, aligning with recent supportive policy measures and consumption trends, growth is expected to slow thereafter.
This moderation to about 1.4% annual real GDP growth from 2026 is attributed to balancing forces within the economy. Although consumption and investment are projected to remain comparatively resilient, they are counterbalanced by broader uncertainties and pressures that temper sustained expansion.
Fiscal dynamics play a notable role in shaping the outlook. The UK’s debt-to-GDP ratio is forecasted to gradually rise, surpassing 106% by 2027. This trajectory may constrain fiscal policy options and weigh on economic confidence, factors which the OBR incorporates in its growth projections.
Overall, the forecast underscores a “narrow path” for growth that requires careful navigation by policymakers and economic actors. For business leaders, academics, and policymakers, this gradual deceleration highlights the importance of monitoring fiscal health and economic indicators to inform strategic decisions in the medium term.
The outlook suggests a stabilizing but subdued economic environment as the UK transitions from the near-term uplift toward more moderate expansion, influenced by recent policy impacts and structural economic variables.