Whisper it quietly, but the UK economy might finally be turning a corner under Labour.
Actually, don’t whisper it quietly. Whilst there’s plenty Keir Starmer and his government have got wrong since their landslide election win, one of their main faults might be an inability to let people know when they’ve got things right.
So, allow us to do it for them, and explain to you how the UK economy may very well be on an upward curve, as proven by plenty of data released this month.
READ NEXT: Reform UK is trailing in the one poll that really matters
Growth is up more than forecast
Figures released this showed that the UK economy grew by 0.3% in November 2025, beating predictions.
This was largely thanks to an increase in industrial output, driven by car production rebounding after a dreadful few months, and an increase in services.
Analysts had expected the economy to grow by 0.1% in November, after a 0.1% contraction the month before.
Borrowing down more than forecast
Whilst growth has been up more than expected, borrowing has come down by more than expected.
Official figures from the Office for National Statistics showed that government borrowing was £11.6bn in December. This was a sharp drop of £7.1bn compared to December 2024.
This beat economists’ predictions, and was due to more income from taxes and higher National Insurance Contributions outweighing spending.
Chief Secretary to the Treasury, James Murray, said the figures were a sign the government was “stabilising the economy, reducing borrowing, rooting out waste in the public sector”.
Surge in productivity
One of the main criticisms thrown the way of the UK economy is its productivity. But this could be changing.
A study from the Resolution Foundation released this month found a “blistering” productivity surge had taken place.
The research found that this surge had been masked by problems with official statistics. By looking at an alternative measure, the Resolution Foundation found that productivity has grown by 3.4% in the six quarters after the start of 2024.
This is a pace not seen since before the 2008 financial crisis.
The research found the productivity was also driven by ‘zombie’ firms that contribute little to the economy being cleared out by high energy prices, interest rates and wage costs.
Growth forecast to be only behind US and Canada in G7
There are strong predictions for the UK economy in 2026 as well, with the country forecast to achieve stronger economic growth than most of the G7.
According to the International Monetary Fund, only the American and Canadian economies will grow more than Britain’s in 2026.
The IMF maintained its UK economic growth forecasts for 2026 and 2027 at 1.3 per cent and 1.5 per cent respectively.
As a result, Rachel Reeves reckons 2026 will indeed be the year the UK “turns a corner.”
“The IMF has upgraded our growth for the third time in a row since April 2025, putting us on course to be the fastest growing European G7 economy this year and next.”
She added: “Thanks to the stability we have brought to the economy and the investment we’ve unlocked, we continue to defy the forecasts and ease the cost of living for families by bringing down bills.”