Your monthly guide to the UK economy, giving you a monthly overview of the major trends impacting the UK's main business sectors.
Government bond yields have risen globally…
2025 has gotten off to an eventful start. The turn of the year saw notable rises in sovereign debt yields across many advanced economies, sparking concern over government borrowing costs in
highly indebted countries. Our recent note unpacks the rise in yields : despite the global synchronicity, concerns around a deteriorating growth outlook exacerbated the volatility in the UK.
UK yields have edged lower since mid-January, but markets remain sensitive to any signs of a weaker economic outlook. A further spike in yields could also have implications for the public finances: most analysts believe that the rise in borrowing costs so far has eroded the Chancellor’s headroom against her fiscal rules.
…amid activity weakening at home…
Concerns over the outlook followed signs of softer activity over H2 2024. Revisions to official data showed that the economy has flat-lined since the summer of 2024 – the latest data for November showed that the
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