It fell short of the 0.2 per cent forecast as the services sector registered zero growth

The UK economy experienced modest growth in the fourth quarter of 2025, falling marginally short of predictions as an anticipated lift from the services sector failed to materialise.

Latest data from the Office for National Statistics (ONS) revealed the economy grew a lacklustre 0.1 per cent in the three months to December 2025.

A poll of City economists by Bloomberg had forecast 0.2 per cent growth for the fourth quarter.

This occurred as the services sector, which is frequently regarded as the powerhouse of the economy owing to its substantial contribution of over 80 per cent to GDP, registered no growth during the period.

Production output rose 1.2 per cent whilst construction contracted 2.1 per cent, as reported by City AM.

“The economy continued to grow slowly in the last three months of the year, with the growth rate unchanged from the previous quarter,” Liz McKeown, director of economic statistics at the ONS, said.

“The often-dominant services sector showed no growth, with the main driver instead coming from manufacturing.”

McKeown added construction recorded its weakest performance in more than four years.

A rise in activity was anticipated by economists following numerous surveys in the final quarter which indicated businesses had suspended their investment plans until uncertainty surrounding the public finances was resolved. Reeves had been anticipated to confront a severe fiscal shortfall following a productivity downgrade.

However, the Office for Budget Responsibility’s economic forecast subsequently revealed a spike in tax revenues – driven primarily by inflation – which more than compensated for the £16bn downgrade.

Nevertheless, Reeves imposed tax increases totalling £26bn in the Budget, although businesses managed to mitigate some of their gravest concerns.

The elimination of certain fiscal uncertainty was predicted by economists to have triggered a boost in activity following the November Budget.

An Institute of Directors (IoD) survey preceding the Budget demonstrated private sector confidence had tumbled to its lowest level since the industry body began gathering data a decade earlier as tax speculation intensified.

Economists have raised concerns about a late-year growth surge with Oxford Economics highlighting that any improvement would represent “payback” for declining output during preceding months.

“This appears to be noisy data rather than there being any strong underlying narrative,” Oxford Economics UK economists Andrew Goodwin and Edward Allenby said.

The Bank of England also delivered Reeves a setback during the Monetary Policy Committee’s most recent meeting where they reduced their growth projection for 2026 to 0.9 per cent from 1.2 per cent.

This coincided with a revised growth estimate for 2025 of 1.4 per cent, down from the earlier 1.5 per cent. Simon French, chief economist at Panmure Liberum, stated: “2026 won’t be a vintage year for UK economic performance by historical standards.

“The composition of economic growth remains overly reliant on public sector spending, and housing wealth.”

Africa emerged as the world’s fastest-growing solar market in 2025, even as global growth slowed, according to a new report from the Africa Solar Industry Association.

The continent’s installed solar capacity rose 17% this year, driven largely by imports of Chinese-made solar panels.

Globally, solar capacity increased 23% to 618 gigawatts (GW) in 2025. While that is still strong growth, it marks a slowdown from the 44% jump seen in 2024.

In contrast, Africa’s steady rise shows a shift in where renewable energy momentum is building.

“Africa’s growth is driven by changing policies and enabling conditions in a number of countries,” said John Van Zuylen, CEO of the Africa Solar Industry Association.

Speaking at the Inter Solar Africa summit in Nairobi, he added, “Solar energy has moved beyond a handful of early adopters to become a broader continental priority. What we are seeing is not temporary. It is policies aligning with market dynamics.”

According to AP News, Chinese companies have played a key role. “Chinese companies are the main drivers in Africa’s green transition,” said Cynthia Angweya-Muhati, acting CEO of the Kenya Renewable Energy Association.

She noted they are investing heavily in supply chains across the continent’s green energy system.

Still, not all imported equipment is yet in use. Since 2017, nearly 64 gigawatts peak (GWp) of solar equipment has been shipped to Africa, but only 23.4 GWp is currently working. A gigawatt peak measures the highest possible power output under ideal conditions.

Solar Boom Spreads Across Africa Beyond South Africa

Solar demand is spreading beyond traditional leaders. South Africa once accounted for about half of all solar panel imports to Africa. Now, its share has fallen below one-third as other nations ramp up purchases.

In 2025, 20 African countries set new records for solar imports, and 25 countries each imported at least 100 megawatts, Yahoo reported.

Nigeria overtook Egypt as the second-largest importer, as homes and businesses turned to solar and battery systems instead of diesel generators.

Algeria’s imports jumped more than 30 times compared to the previous year, with Zambia and Botswana also seeing strong growth.

Battery prices have dropped sharply, falling to $112 per kilowatt-hour in 2025 from $144 in 2023. Lower costs allow families and companies to use solar power day and night. “This ever-decreasing price of storage has game-changing implications for Africa,” Van Zuylen said.

Despite progress, policy uncertainty remains a challenge. “The problem is not the opportunity. It’s visibility,” said Amos Wemanya, senior analyst at Powershift Africa.

“If a government announces a plan, companies need to trust that it will remain in place.”

Originally published on vcpost.com

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