The UK economy surged back to growth in June after consecutive contractions in April and May - but overall the second quarter of the year showed the economy grew far less than it did in the first. A total 0.3 per cent GDP growth was better than some analysts were expecting, but is still slow movement overall given the government’s plan to kickstart businesses and get the nation firing on all cylinders.
Meanwhile, it’s A Level results day for college students in the UK - meaning lots of university-related financial discussions to be had as well, including student loan info.
Stock markets rose in the US but fell in Asia overnight, with the FTSE 100 following the latter on a downward path in trading on Thursday. Aviva and the Admiral Group are among those who reported their latest financials today.
Follow The Independent’s live coverage of the latest stock market and business news here:
Key points
- UK economic growth slowed in second three months of the year - but June was strong
- British Chambers of Commerce demand 'no more business taxes in Budget'
- National Financial Awareness Day: Expert tips to take control of your money
Gaucho restaurants CEO issues stark warning to Reeves over tax hikes
16:23 , Karl MatchettA senior figure in the hospitality sector has sent a stark warning to Rachel Reeves ahead of the autumn Budget: “Your taxes are curtailing growth”.
Baton Berisha, chief executive of Rare Restaurants - the company which owns Gaucho and M restaurant brands - has called for National Insurance Contributions (NICs) to be restored to the level they were before April’s increase and said he had the backing of others in the industry wanting the same.
Pointing to Office for National Statistics (ONS) figures, Mr Berisha highlighted 84,000 jobs have been lost in the hospitality sector since the NICs hike took effect in April 2025 - equating to roughly 13,000 jobs disappearing per month since then.
As a result, Mr Berisha has opted to speak out now “to highlight the critical issues that the hospitality industry in the UK is facing.” They are, he says, largely “due to Rachel Reeves’ punitive taxes which are curtailing - rather than encouraging or supporting - growth.”
More here:
Gaucho restaurants CEO issues stark warning to Reeves over tax hikes
Business and Money - 14 August
08:20 , Karl MatchettGood morning! Lots to cover today so we’ll get straight into it on the business and money coverage here on The Independent.
Economic growth is our chief focus but as well as that, all the student finance related info, stock market and companies data and general personal finance news you could want is coming your way.
UK GDP grows by 0.3% in second quarter of 2025 - down from 0.7% in January to March
08:24 , Karl MatchettGrowth in the UK economy slowed in the second quarter of this year, a mix of pressures from tariff uncertainty, businesses and individuals coping with tax increases and ongoing inflation struggles.
New official figures from the Office for National Statistics (ONS) said gross domestic product (GDP) grew by 0.3 per cent between April and June.
That follows 0.7 per cent growth in the first three months of the year.
However, the April-June figure was stronger than the 0.1 per cent level widely expected by economists, after a stronger uptick in activity in June and revised data for earlier in the quarter.
Chancellor Rachel Reeves said the economic figures were “positive” but added that there is “more to do” to drive growth in the economy.
Combination of GDP, inflation and interest rates a 'troublesome combination for households'
08:43 , Karl MatchettWe’ll bring you plenty of comment and reaction across the morning on those economic figures - not just about the actual financials and business-related stuff, but what it means for you, your family and your general money state going forward.
For instance - even though we have now had another interest rate cut, inflation remains high and that combination, alongside low UK growth, plays together to be difficult for households in the coming months.
Alice Haine, personal finance analyst at Bestinvest, explains all:
“The UK economy expanded by just 0.3% in the second quarter, a slowdown from the more robust figure of 0.7% recorded in Q1, as rising costs, a cooling labour market and global uncertainty – particularly around US President Trump’s tariff policies and geopolitical tensions in the Middle East – weighed on business and consumer sentiment.
“But a softening labour market, stubbornly high inflation, slowing wage increases and a higher tax burden present a troublesome combination for household budgets.
“While five interest rate cuts since August last year have offered some relief, the latest 25 basis-point reduction to 4% may not be reflected in lower borrowing costs across the board as some lenders remain cautious about future rate cut expectations amid niggling inflationary pressures.
“With food prices continuing to surge, the Bank of England has signalled that interest rates may need to remain elevated for longer as it expects consumer price inflation to peak of 4% in September.”
British Chambers of Commerce demand 'no more business taxes in Autumn budget'
09:05 , Karl MatchettBusinesses simply can’t afford more tax burdens - and the latest growth figures show it.
That’s the view of the British Chambers of Commerce, with small firms in particular struggling to cope.
Stuart Morrison, research manager at the BCC, said:
“Better than expected data for both Q2 and the month of June are welcome – but the numbers mask the underlying pain being felt by businesses across the UK.
“Without thriving firms the economy will continue to struggle. We saw better than expected growth at the start of the year, largely because of stockpiling ahead of US tariffs.
“However, tax burdens at home, alongside uncertain global trading conditions, created a very challenging environment for the UK’s SMEs in April-June. The impact of April’s national insurance hike is now clear, with our latest survey showing investment and recruitment hit.
“Long-term strategic plans from Government on industry, infrastructure and trade have been widely welcomed by businesses. But with the focus now on delivery, persistent cost pressures mean firms are left with one hand tied behind their back.
“There must be no more business taxes in the Autumn budget. Our recently published Blueprint for Growth document offers Government practical ways forward, to help businesses invest, recruit and trade.”
Have we really become a nation of HMRC snoopers?
09:20 , Karl MatchettFraud tips to HMRC have risen by more than 10,000 year on year, says James Moore. But with Britain facing a ‘tax payment gap’ of more than £40bn – enough to fund Rachel Reeves’s black hole – are the sneaks and snitches on the side of the angels?
.jpeg?width=1200&height=800&crop=1200:800)
National Financial Awareness Day: Expert tips to take control of your money
09:52 , Karl MatchettTalking about money is still taboo in the UK.
However, one in three adults experiences anxiety about their finances, while one in ten has no savings.
Both are things we need to change.
So, to get the conversation going, on National Financial Awareness Day, we’re offering our top tips on how to become more financially resilient - and where you can seek help if you’re struggling.
National Financial Awareness Day: Expert tips to take control of your money
Think tank warns against downgrading UK economy forecasts
10:00 , Karl MatchettAn influential think tank is imploring the OBR not to downgrade economic forecasts for the UK to avoid hitting the government with “billions” more to find in the Budget.
The IPPR estimate that changes made by the OBR could range “from negligible to a £44 billion hit to the public finance”, meaning Rachel Reeves would have to find even more through tax raids or spending cuts than she’s already likely to do.
Carsten Jung, associate director for economic policy at IPPR, said:
“Today’s productivity data show that the UK economy still faces challenges. But, all forecasters agree that productivity will rebound — the real question is by how much.”
“There is growing pressure on the OBR to downgrade its productivity growth forecast. Some of the larger numbers floated would have close to austerity-level implications for the UK.
“The OBR should resist making such a change now. Interpreting the UK’s productivity statistics at the moment is like navigating through fog — the uncertainties are vast. There are, in fact, some grounds for optimism about a recovery.
“By holding the line this autumn, the OBR can avoid triggering damaging fiscal tightening and give itself time to act when the outlook becomes clearer.”
Government to be hit by lower-than-expected take from private school fees
10:20 , Karl MatchettLabour’s plans to raise public funds through private school fees will be an effective dead end, reports one tax and advisory firm, Blick Rotherberg.
The government have to find billions in raised tax takes or fees, or else by cutting spending.
National Insurance hikes, increased taxes on businesses and private school fees are all avenues chosen so far - but the income from the latter is described as something which is more likely to hit less-well-off families trying to send their children to private schools rather than the very wealthy.
Fiona Fernie, a partner at the firm, said: “Government figures suggested that VAT on private school fees would raise an extra £460m in the 2024/25 financial year, rising to £1.7bn by 2029/30, which is nothing compared to the £50bn that is needed.
“It is likely that the Government’s forecasts of what will be raised from VAT on private school fees has been overblown. Many of the wealthiest chose to pay their children’s private school fees in advance of the VAT implementation deadline. The level of prepaid fees last year in the top 50 private schools was 4.25 times the level in the previous year.
“The less well-off will struggle the most. Many of them already make significant sacrifices to send their children to private school, sometimes because the state schools available to them are inadequate or cannot provide the specialist services required. They may be priced out of private schooling or see the schools they rely on close down.”
Tax rises now 'inevitable' says economic expert
10:40 , Karl MatchettTax rises in autumn.
We don’t yet exactly know where they will be, but you can bet your last pound (if you’ve still got one by then) that we’ll be seeing them in the Budget, says....well, every economist in the country, to be honest.
But there’s still a fine path to tread between now and the end of 2025, to ensure the economy doesn’t get any worse.
“At best, there will be muffled cheers from the Treasury this morning, as UK Q2 GDP numbers surpassed analyst expectations. Our view: less bad; not good,” said Nick Lawson of Julius Baer UK.
“Growth slowed sharply to 0.3% but this is ahead of the consensus expectations of a paltry 0.1%. We had long suspected the UK benefited from a sugar rush of activity in the first three months of the year, as activity reflected frantic efforts to front-run looming tax and tariff changes. Now the rush has passed, we are left with the headache.
“Where does this leave the Chancellor for the autumn? It seems increasingly clear the wider economy will not be pulling magical rabbits out of the hat on her behalf. Runaway growth would solve so many of her problems. It seems clear, too, the Bank will not be browbeaten into cutting rates.
“For the moment, we think material tax rises are inevitable in the Budget.
“Though, both the Bank and the Chancellor remain tiptoeing a very narrow and very perilous path: try to tame inflation or balance the books too aggressively, and today’s anaemic growth figures could yet implode; try to stimulate growth too generously, and rampant inflation and bond yields could scupper both parties’ wafer-thin market authority. We envy neither's task into the final throes of 2025.”
A Level results: All you need to know about student loans
11:00 , Karl MatchettTime for a switch of tack for a little while, from the economic woes of the older generations to the immediate issues facing the younger ones: what to do now you’ve got your A Level results?
If you’re heading (or your child is!) to university we’ve got a couple of important pieces you should see regarding your money.
For many that will be the first time they are really responsible for significant finances, so information is key.
First up, here’s what you should know if you are looking at getting a student loan to cover fees and expenses while studying.
What are student loans and when do you start repaying them after university?
How to budget and manage your money as a student
11:20 , Karl MatchettOK, you’ve got your results, you’ve picked your course and uni and you’ve applied for loans.
Equally important is knowing how to deal with that sudden influx of cash three times a year.
Our money writer Marc Shoffman has the lowdown on how best to learn about managing your money - plus the best student bank accounts with perks on offer.
University: How to budget and manage your money as a student
Reeves should 'prioritise lifting household and business confidence' in Budget - expert
11:40 , Karl MatchettOk so where did the economy grow, where is it floundering and what comes next?
Sanjay Raja, Deutsche Bank’s chief UK economist gives a rundown:
What disappointed? “For starters, household spending – the growth engine of the UK economy nearly stalled coming in at a paltry 0.1% [higher than January-March]. Business investment too dipped, falling by near 4%. Put simply, households and businesses were less active over the spring months – perhaps owing to the increase in global uncertainty and start of the trade wars.
The good news? “The strength of the June GDP data should imply some strong and positive ‘carry over’ effects into July-September. And while we previously saw some downside risks to our annual 1.2% growth projection, today’s data points in the opposite direction – a welcome sign for the Chancellor and the OBR.”
Conclusion: “To be sure, the economy is growing. Positive momentum is brewing. But animal spirits remain tepid. While the Chancellor is poised to focus her Budget on improving productivity – a very welcome focus for the UK – Number 11 should also prioritise lifting household and business confidence to sustain the UK’s outperformance.”
Diploma finance chief quits after ‘lapse of judgment’ at company event
12:42 , Karl MatchettThe finance chief of Diploma has quit the FTSE 100-listed business after an incident at a recent event, the company announced.
Chris Davies has resigned, with immediate effect, and the firm has launched a search for a new chief financial officer.
Diploma said in a statement: “This decision follows a recent company event where, through a lapse in judgement, his personal behaviour did not meet the high standards required of the group’s leadership team.”
The company did not give details as to the nature of the issue but it is understood to be an isolated incident.
Diploma finance chief quits after ‘lapse of judgment’ at company event
FTSE 100 slightly rises after weak GDP data
13:07 , Karl MatchettInvestors aren’t piling into London-listed companies today on the back of that economic data earlier today.
The FTSE 100 is up only 0.05 per cent so far - and has been down most of the day.
Admiral Group is up 5.5% as the biggest riser of the day on strong financials reported this morning.
Boohoo founder should be investigated over debt collection, says Mike Ashley
13:34 , Karl MatchettMike Ashley’s Frasers Group has urged Boohoo to suspend and launch an investigation into the online fashion firm’s chairman and founder over reported debt collection tactics.
Earlier this week, the Telegraph reported Mahmud Kamani sought to collect a £100,000 personal debt by taking a cut of payments to one of its jeans suppliers.
It comes amid increased friction between Frasers founder Mr Ashley and retail rival Mr Kamani in recent years.
In a letter through its legal advisers, Frasers Group – which owns an almost 29% stake in Boohoo – said it had “very serious concerns” about the reports.
In the letter, Frasers said the allegations would be “very serious and damaging to the reputation of Boohoo”.
More here from PA:
Boohoo founder should be investigated over debt collection, says Mike Ashley
£1.5bn deal for key European liquefied natural gas output
13:58 , Karl MatchettNational Grid has agreed to sell Europe’s largest liquefied natural gas terminal to British Gas owner Centrica and Energy Capital Partners, in a deal worth £1.5 billion.
The two firms will be acquiring the Isle of Grain terminal in Kent.
Grain imports and stores gas from around the world, and connects it to the European energy market. Its customers include Centrica, Shell, and Qatar Energy.
To transport gas on ships it has to be chilled to around minus 162C, turning it into liquified natural gas (LNG). This can then be put into specialised container ships and moved around the world.
LNG has become increasingly important to the Europe’s gas supply since pipeline imports from Russia were cut off following the country’s invasion of Ukraine.
PA
So the economy isn’t shrinking… but when will we feel any benefit, chancellor?
14:30 , Karl MatchettA 0.3 per cent rise in GDP is an unexpected filip for Rachel Reeves at the end of her first year in charge of the British economy, which is now the strongest in the G7 – but it could be bad news for those hoping to get a new mortgage, says James Moore
So the economy isn’t shrinking… but when will we feel any benefit, chancellor?
US and UK stocks fall on alarming inflation data
15:03 , Karl MatchettUS inflation grew 0.9 per cent for July, latest figures have shown.
That has resulted in stocks falling on both sides of the Atlantic this afternoon - the S&P 500 had been up in pre-market trading but it’s down 0.13% so far this afternoon.
For the FTSE 100 it’s about the same level, though smaller companies have fallen more, the 250 down around 0.4%.
National Financial Awareness Day: Expert tips to take control of your money
15:49 , Karl MatchettTalking about money is still taboo in the UK.
However, one in three adults experiences anxiety about their finances, while one in ten has no savings.
Both are things we need to change.
So, to get the conversation going, on National Financial Awareness Day, we’re offering our top tips on how to become more financially resilient - and where you can seek help if you’re struggling.
National Financial Awareness Day: Expert tips to take control of your money
Business and Money - 14 August
16:29 , Karl MatchettThat’s it for us today - thanks as always for joining and we’ll be back on Friday morning with more business, companies, stock markets and finance news.
See you then.
