UK GDP grew 0.3 per cent in Q2 2025, according to the Office for National Statistics (ONS) — slower than the 0.7 per cent in Q1 but ahead of forecasts. The economy contracted in April and May before bouncing back with 0.4 per cent growth in June.
Liz McKeown, ONS director of economic statistics, said that while the economy was “weak across April and May” due to activity being brought forward ahead of tax and tariff changes, it “recovered strongly in June”. She highlighted that growth was “led by services, with computer programming, health and vehicle leasing growing,” The Guardian reported.
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The inclusion of vehicle leasing among the fastest-growing service industries in Q2 has been welcomed by finance providers, who see it as a sign of sustained demand for mobility and fleet solutions. Analysts note that post-pandemic supply chain stabilisation and a shift towards flexible, asset-light business models are helping drive uptake.
Mike Randall, CEO at Simply Asset Finance, said the latest GDP data comes “against the backdrop of higher employer costs” from the recent National Insurance rise. “Sluggish GDP growth this quarter shines a further spotlight on the business impact of National Insurance hikes,” he noted. “As costs have increased, investing in growth and innovation has, for the time being, had to take a back seat for SMEs.”
However, Randall stressed that demand remains strong: “With recent infrastructure announcements from the Government…the potential for growth is sky high. But this requires businesses to have ready access to the right funding and support so they can strike while the iron is hot.”
Business groups have warned that rising taxes and rates could weigh on momentum. The Financial Times reported that over 100 large supermarket stores could be at risk of closure under proposed business rates increases. In London, Ros Morgan of the Heart of London Business Alliance told City AM that a potential 26 per cent rise in business rates would hit firms “with no justification or reform”.
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By GlobalDataAt the same time, Bloomberg has reported a shift in hiring practices, with more firms turning to self-employed contractors to avoid employers’ national insurance costs. Joshua Toovey of IPSE told the outlet: “These self-employed are a more attractive option…I can save money.”
