TOMD Content Deployment

Latest data from the Office for National Statistics (ONS) indicates that the economy experienced a slight expansion of 0.1% in August. In the three months to August, GDP increased by 0.3% – this is a slight improvement on the three months to July, which saw expansion of 0.2%.  

The services sector was the main driver of economic growth in the three months to August, increasing by 0.4%, due to a strong contribution from human health and social work activities. However, in August alone, services did not see any growth. Construction increased by 0.3% in the three months to August, while production output decreased by 0.3% due to a significant fall in electricity, gas, steam and air conditioning supply.   

Some experts predict economic growth to continue weakening in the coming months, as households face higher food costs and businesses feel the effects of tax rises that came into effect in April. If the Chancellor announces more tax hikes in the upcoming Budget, there could be further strain. Speaking on this last week, Rachel Reeves said, “I’ve always been very clear that we will continue to prioritise economic and fiscal stability in the UK.” When asked if taxes will be raised further, she said, “As we get the forecast and as we develop our plans, of course we are looking at further measures on tax and spending, to make sure that the public finances always add up.” 

The International Monetary Fund (IMF) has released its latest projections for global growth. From an international perspective, the economy is expected to grow by 3.2% in 2025 followed by expansion of 3.1% in 2026, a slowdown from 3.3% recorded in 2024.  

Meanwhile, the UK has reason to be both cautious and hopeful. On the upside, the UK is set to be the second-fastest growing economy out of all the G7 countries this year, with a projected expansion of 1.3%. This has been revised up from April estimates, reflecting strong activity in the first six months of the year and improvements in what IMF calls the ‘external environment,’ including the trade deal with the US announced in May. However, the UK is also forecast to have the fastest rate of inflation in 2025 and 2026, with CPI predicted to rise by 3.4% and 2.5% respectively. However, IMF believes that, by the end of next year, UK inflation will ease to 2% due to ‘a loosening labour market and moderating wage growth’. IMF’s Pierre-Olivier Gourinchas commented, “The path forward for the Bank of England should be very cautious in its easing trajectory and make sure that inflation is on the right track.” 

Trade tensions are mounting again between the US and China. The two countries reached a reciprocal agreement to reduce tariffs in May 2025, but this fragile truce has been disturbed. On 9 October, China announced that foreign companies will need approval from the Chinese government to export products containing rare earths. These materials are essential to the US, being used in technology such as smartphones, electric cars and military equipment.  In response, President Trump threatened to impose an additional 100% tariff on Chinese goods starting from 1 November. China’s President Xi Jinping and Trump are set to meet later this month. China processes 90% of the world’s rare earths, so experts believe that its new restrictions might give China leverage to negotiate a more favourable trade deal with the US. 

According to data from Moneyfacts, the average two and five-year fixed mortgage rates have risen for the first time in eight months to 4.98% and 5.02% respectively. Although this may come as a disappointment to borrowers, rates are still notably lower than this time last year, where two and five-year rates were 5.40% and 5.07% respectively. Rachel Springall at Moneyfacts commented, “Volatile swap rates and a cautious approach among lenders have led to an abrupt halt in consecutive monthly average rate falls”. 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (22 October 2025) 

The latest data from Halifax shows that house prices decreased by 0.3% month-on-month in September, following an increase of 0.2% in August. Meanwhile, the annual growth rate eased from 2.0% to 1.3%, the slowest rate since April 2024. The average property is currently priced at £298,184.  

Regionally, Northern Ireland continues to see the fastest rate of house price growth in the UK, with an annual increase of 6.5% (down from 7.9% the previous month). At £216,496, prices there remain well below the national average. In England, the strongest annual growth rate was in the North East, where prices went up by 4.8% to an average of £180,443. The North West was the second strongest region in England, with an annual rise of 3.9%. By contrast, prices decreased for the second month in a row in the South West. While in London, the most expensive region in the UK, prices only slightly increased by 0.6% to an average of £543,497. 

Other areas of the housing market saw a slowdown too, with residential transactions falling by 1.7% in August to 93,630, according to HMRC. The Bank of England reported that mortgage approvals fell by 0.7% month-on-month to 64,680.  

Despite this slowdown in activity, Amanda Bryden, Head of Mortgages at Halifax, asserted that it’s not all negative, “This slight monthly dip in house prices reflects a housing market that has remained broadly stable.” She continued, “While affordability remains a challenge, a relatively lower mortgage rate environment and steady wage growth have helped support buyer confidence. Although the broader economic outlook remains uncertain, with the affordability picture gradually improving, we continue to expect modest growth through the remainder of the year.” 

Chancellor Rachel Reeves should avoid ‘directionless tinkering and half-baked fixes’ when seeking to raise revenue in next month’s Budget, the Institute for Fiscal Studies (IFS) has cautioned. 

The think tank said Reeves could generate tens of billions of pounds more each year without breaching Labour’s manifesto pledges but cautioned that doing so would be far from simple. ‘Serious constraints’ exist on Corporation Tax, Council Tax, business rates and fuel duties, according to IFS, while some alternatives for raising tax could be ‘especially economically harmful.’ 

According to IFS, possible measures for consideration could include doubling Council Tax on the most expensive properties, potentially raising £4bn; scrapping Inheritance Tax relief on main homes (could raise £6bn); and extending the Income Tax threshold freeze beyond 2028, which could raise a ‘significant amount’ according to the IFS. 

IFS dismissed a wealth tax as impractical and potentially damaging, and warned that limiting tax relief for pension contributions would be ‘unfair and distortionary.’ Instead, ‘better options’ for increasing tax on pensions could include reforming the tax-free element. 

The latest Business Activity Index from S&P Global shows that the UK service sector recorded a reading of 50.8 in September. This is the lowest level in five months and down from 54.2 in August, which had been a 16-month high. While the September reading is above the neutral 50.0 threshold, it indicates only a modest rate of growth.  

The slowdown has been attributed to economic uncertainty and weaker consumer confidence, with many businesses deferring spending decisions until after the Autumn Budget. Meanwhile, employment levels continue to fall due to rising staff costs. Plus, incoming new work only marginally increased and export sales declined, which many survey respondents have linked to challenging global conditions.  

Donald Trump has hailed “the historic dawn of a new Middle East” in an address to Israeli lawmakers, after helping broker a ceasefire between Israel and Hamas in Gaza. In the first speech by a US President to the Israeli Parliament since 2008, Trump described the day (13 October) as a “day of profound joy” following “two harrowing years” of conflict. 

His remarks to the Knesset (Israeli Parliament) came as the remaining hostages held by Hamas were freed. In turn, Israel released Palestinian prisoners, along with more than 1,700 others detained during its two-year military operations in the enclave. 

Trump’s whirlwind visit to the region also included a peace summit in Sharm El-Sheikh, where he signed a declaration for bringing peace to Gaza with the leaders of Egypt, Qatar and Turkey. 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (15 October 2025) 

Ahead of the Autumn Budget on 26 November, the British Chambers of Commerce (BCC) has urged the government to take decisive action to improve the competitiveness of the UK economy. In a new report the BCC warned that, without increasing investment and productivity, the UK risks falling further behind its international peers. 

In 1997, the International Institute for Management Development ranked the UK the 9^th most competitive nation out of 46 countries. However, its position has slipped since then and is now 29^th out of 67 countries, despite being the sixth largest economy in the world. The BCC has therefore made over 40 recommendations on how the UK can regain its position as a competitive economy, focusing on three key areas: reducing the cost of investment, fostering innovation and updating its strategic offering.  

The report emphasised that labour costs are a key concern for businesses, urging the government not to raise taxes further in future fiscal events such as the Budget. Plus, it proposed re-evaluating business rates annually, so they are more up to date and suggested supporting growth and investment by prioritising infrastructure, such as the new runways at Heathrow and Gatwick airports and expansion of Luton.  

Director of the BCC, Shevaun Haviland, said, “If the UK economy is not competitive then it cannot grow. Our slide down the rankings has been driven by increasing volatility on tax and regulation which has led to an inexorable rise in the cost of doing business. There is also growing speculation about what’s coming in the Autumn Budget, which is still weeks away. This is eroding business confidence further as the government’s messaging of ‘tough choices’ adds to the fear.”  

She added, “Our message to the rest of the world has been inconsistent. If we want the UK to be more productive and to grow our economy, then we must take action to become more competitive internationally.” 

UK GDP growth slows in Q2 

The latest figures from the Office of National Statistics (ONS) confirmed that, despite a promising start to the year, the UK economy slowed in Q2.  

Gross domestic product (GDP) is estimated to have grown by an unrevised 0.3% between April and June, compared to an unrevised increase of 0.7% in Q1 of this year. The construction (1.0%) and services (0.4%) sectors were key drivers of growth in Q2, but this was offset by a decrease in the production sector (-0.8%). ONS observed that the overall slowdown was partly due to Stamp Duty reforms, which brought some activity forward to February and March.  

More UK adults using mobile payment services 

A report from UK Finance shows that more people are using their phones to pay while cash use declines further.  The data found that last year, 57% of UK adults were registered for mobile payment services, such as Apple Pay and Google Pay. Half the population said they were using mobile contactless at least once a month. Meanwhile, the proportion of cash payments fell from 12% in 2023 to 9% in 2024, the lowest it has ever been. It is expected that in 2034, cash will account for 4% of all payments in the UK.   

Changes to home buying process to benefit first time buyers 

The government has outlined proposals aimed at speeding up the home buying process and reducing the admin burden involved in purchasing a home. The proposals, specific to first time buyers, will require sellers and estate agents to provide buyers with key information about their chosen property upfront, including the condition of the home and details of the chain. Currently in the consultation stage, according to the government, the changes will put an end to ‘nasty surprises’ which result in last-minute collapses, giving greater confidence to first-time buyers. Binding contracts could also be introduced to stop people walking away from agreements. Steve Reed, Housing Secretary, commented on the proposals, “Buying a home should be a dream, not a nightmare. Our reforms will fix the broken system so hardworking people can focus on the next chapter of their lives.” 

Here to help 
Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (8 October 2025)