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GDP Growth (Q3)
0.1%
Down from 0.7% in Q1 · First decline since Dec 2023
⬆️
Unemployment Rate
5.1%
Highest since Jan 2021 · Up from 4.3% year ago
📊
Youth Unemployment
16%
Highest in a decade · 735,000 young people
💼
Employment Change
-171K
Payrolled employees down year-on-year
💷
Real Wage Growth
£2.73
Per week after inflation · Workers feeling the pinch
🏢
Business Confidence
-31
CBI Manufacturing · 4th consecutive quarter negative
The International Comparison
Q3 2025 GDP growth shows stark divergence between UK's high-tax approach and US economic performance
United Kingdom
0.1%
• Tax burden at 38%+ of GDP (highest since WWII)
• Net outflow of millionaires
• Investment lowest in G7 (18.6% of GDP)
United States
4.3%
• Lower overall tax environment
• Attracting international capital
• Growing 40x faster than UK
Key Findings
53%
First time ever a majority of UK businesses prefer lower taxes and less government spending
+6pp
Jump in businesses citing high taxes as deterring investment—now the top concern
£7.5bn
Revenue shortfall vs October forecast—largest downward revision since 2012
1,800
Non-doms departed in 2024-25—50% above OBR forecast, taking tax base with them
-19%
Capital gains tax receipts fell from £16.9bn to £13.7bn despite rate increases
Q1 2026
Full impact of employer NI increases yet to hit—April 2025 brings 15% rate + lower threshold
The Deterioration Timeline
Q1 2025
GDP Growth: 0.7%
Strong start to year with robust quarterly growth
Q2 2025
GDP Growth: 0.3%
Growth more than halves as business confidence weakens
Q3 2025
GDP Growth: 0.1%
Near-stagnation · Manufacturing down 0.8% · Youth unemployment hits decade high
OCT 2024
Autumn Budget Tax Increases
CGT rates up to 18%/24% · Employer NI to 15% · Multiple threshold freezes extended
OCT 2025
Three-Month Decline Begins
First GDP contraction since December 2023 · -0.1% in three months to October
APR 2025
Major Tax Increases Take Effect
Employer NI rises to 15% · Threshold drops to £5,000 · National Living Wage to £12.21
What's Driving the Decline?
Tax Burden at Historic Highs
National Accounts taxes reaching 38%+ of GDP—highest level ever. Employers' social contributions up 4.1% while wages only +1.1%. Tax taking 7.3 percentage points of compensation growth.
Behavioral Responses Intensifying
Non-dom departures 50% above forecast. CGT forestalling creating one-time spike followed by depressed activity. Investment decisions being postponed or cancelled.
Labor Market Weakening
Unemployment at 5.1%—highest in almost 5 years. Youth unemployment at 16%—decade high. Employment falling for second consecutive quarter. Redundancies rising.
Business Confidence Collapsed
CBI Manufacturing at -31. Most sectors in negative territory. Tax burden concerns at 7-year high (58% in Property sector). Investment intentions weak across economy.