Stace Outlook Index, Q2 2025

The Stace Outlook Index brings you the latest updates on the UK economy, the industry and Tender Price Index (TPI) forecasts.

Fragile and uncertain

The Stace Outlook Index brings you the latest updates on the UK economy, the industry and Tender Price Index (TPI) forecasts.

The UK economy ended 2024 in a precarious position, narrowly avoiding a technical recession but offering little sign of meaningful or sustained growth. GDP stagnated in the second half of the year, with weak business investment and subdued consumer spending weighing on performance. Although inflation eased from its 2022 peak, it remained above the Bank of England’s 2% target, limiting the scope for interest rate cuts. High borrowing costs continued to constrain both businesses and households, while government fiscal tightening added further pressure. The Bank’s decision in May to lower interest rates from 4.5% to 4.25% signals growing concern over the fragility of the economy amid rising global uncertainty but also suggests cautious optimism that monetary easing could support recovery if underlying conditions improve. However, the move alone is unlikely to materially lift sentiment in the short term given persistently weak indicators.

In this report, we will explore pipeline momentum, the Construction PMI, the impact of the general election and global instability.

Reference List

ONS, UK Economic Data

ONS, Construction Data

BCIS

S&P Global/CIPS

DBT