What's happening to the UK economy and how does it affect you?

What's happening to the UK economy and how does it affect you?2 hours agoShareSaveAdd as preferred on GoogleGetty ImagesPoliticians often talk about the importance of economic growth. It matters because it affects things like pay increases for workers and the amount of tax the government raises to pay for services.However, many analysts are concerned that the UK economy is not growing fast enough, and are worried about the negative impact of the US-Israeli war with Iran. What is GDP and why does it matter?GDP stands for gross domestic product, which is a measure of all the economic activity of companies, governments, and people in a country.In the UK, the Office for National Statistics (ONS) publishes new GDP figures every month. However, these can vary quite a lot and the quarterly figures - covering three months at a time - are considered more significant.Most economists, politicians, and businesses like to see GDP rising steadily.That's because it usually means people are spending more, extra jobs are created, more tax is paid, and workers get better pay rises.When GDP is falling, it means the economy is shrinking. This can be bad news for businesses and workers as it can lead to pay freezes and job losses.If GDP falls for two quarters in a row, that is known as a recession.What is happening to the UK economy?The latest official figures show that the UK economy grew faster than expected in February.The economy expanded by 0.5%, the biggest monthly rise for more than two years.But this refers to a period before the outbreak of the Iran war, which is having a huge impact on the global economy.When the Labour government took power in July 2024, it said growth was its top priority.Across 2025 as a whole, UK GDP was estimated to have increased by 1.4%, up from 1.1% in 2024. In March, the Office for Budget Responsibility (OBR) - the government's official forecaster - cut its prediction for how much the UK's economy would grow across 2026 from 1.4% t...