UK economic growth set to slow, dealing blow to Burnham’s plans

UK economic growth is forecast to decelerate sharply next year, handing Greater Manchester Mayor Andy Burnham a significant political headache just as he attempts to push forward ambitious regional investment plans.

The Office for Budget Responsibility now projects GDP growth will slow to around 1% in 2025, down from earlier forecasts that had pencilled in closer to 2%. That’s a meaningful gap — and it means less tax revenue, tighter public finances, and harder choices for politicians at every level of government.

What slowing growth means for devolved regions

For Burnham, who has staked much of his political identity on delivering transport upgrades, affordable housing, and a so-called “London-style” integrated transit network across Greater Manchester, the timing couldn’t be worse. Central government funding for regional projects is tied, directly or indirectly, to the health of the broader economy. When growth stalls, Treasury coffers tighten.

Burnham’s office didn’t respond to a request for comment before publication, but a spokesperson for the Northern Mayors group said they were “deeply concerned that slowing national growth will disproportionately impact regions that are still catching up after years of underinvestment.”

The squeeze isn’t just a northern problem. But the north of England remains particularly exposed, with productivity levels still roughly 16% below the national average according to ONS data.

A difficult road ahead

Business investment has already softened following the Autumn Budget, with employers citing higher National Insurance contributions as a drag on hiring.

Still, some economists argue the slowdown could be temporary. Much depends on whether global conditions stabilise and whether the government can push through its infrastructure agenda fast enough to offset the drag. Don’t hold your breath.