U.K.'s Q3 GDP Signals "Disappointing" Summer, Says Deutsche Bank

07:17 AM EST, 11/13/2025 (MT Newswires) -- As Deutsche Bank collects all the main United Kingdom macroeconomic data points for the summer period, it's clear that the summer of 2025 was a little "disappointing," said Sanjay Raja, the bank's chief U.K. economist.

With inflation picking up again and unemployment rising, gross domestic product growth took another step down. While Deutsche Bank expected some 'course correction' following the strong start to the year, Thursday's Q3 GDP release speaks of a slightly weaker economy. Quarterly GDP expanded by only 0.1% quarter over quarter -- sitting in the middle of the G7 pack and coming in below both market and Bank of England expectations.

Looking at the detail, the biggest drags on growth came from net acquisitions (-98.5% quarter over quarter) and business investment (-0.3% quarter over quarter) -- both "notoriously" volatile drivers of growth, stated Raja. September GDP also slipped, relative to the bank's expectations, contracting by 0.1% month over month. The monthly fall in output was due to a sizeable drop in manufacturing output instigated by the cyber-attack on JLR.

The bank's economist doesn't expect much of an acceleration to end the year. Quarterly GDP growth will remain range-bound at 0.1%-0.2% quarter over quarter. Deutsche Bank predicts budget uncertainty to start impacting spending in October and November. The bank estimates big investment or hiring decisions to be delayed until the new year.

Altogether, Raja still forecasts annual GDP to expand by 1.4% this year, but downside risks to the bank's 2026 projections are already brewing.

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