Derren Nathan, head of equity research at Hargreaves Lansdown, said: “Confirmation that the UK economy barely grew in the final quarter of 2025 (real GDP +0.1 per cent) hasn’t upset the apple cart, but the potential for activity to dip won’t be lost on the Treasury as the Chancellor battles to balance the books.
“Overseas borrowing as a percentage of GDP grew from 1.6 per cent to 2.5 per cent in the space of a quarter.
“With 10-year gilt yields at their highest levels since 2008, that will make uncomfortable reading for Rachel Reeves, as central banks hold off further rate cuts until the inflationary impact of the Middle East conflict and oil price spike becomes clearer.
“As it stands, markets expect UK rates to rise before loosening can start again.”
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