Your monthly guide from Demsa Accountants
As the first half of the year wraps up, the UK economy finds itself in a delicate position:
inflation is easing, interest rate cuts are on the table, but growth remains patchy. In this edition of the UK Financial Update June 2025, we break down what changed last month, and what might be coming next.
A Fragile Economy
The UK economy shrank by 0.1% in May, following a sharper 0.3% drop in April, according to the latest ONS figures. Services, the backbone of GDP – showed no growth, while manufacturing and construction offered only modest support.
Growth in Q2 is expected to be sluggish, and forecasts for the rest of 2025 have been revised down.
If you’re self-employed or running a small business, it’s a good moment to re-check your budgets and keep some flexibility in your planning.
Jobs Market Cooling Off
Recruitment data for June tells a clear story:
Permanent hiring is slowing
Wage growth is losing pace
And candidate availability has hit a post-2020 high
This suggests that both employers and employees are starting to feel the weight of economic uncertainty.
If you’re planning to hire, there may be more choice, but possibly less confidence in the market overall.
Rates on Hold… for Now
On 20 June, the Bank of England voted to keep interest rates at 4.25%. No surprises there.
But for the first time this year, three out of nine committee members voted in favour of a cut.
Markets now expect a rate reduction in August, with another possible before year-end. This could bring some breathing room for borrowers, but also signals growing concern about the health of the economy.
Tax: No Big Moves Yet, But Changes Are Coming
There were no new tax announcements in June, but speculation is heating up ahead of the Autumn Statement. Some possible developments include:
•Continuing freezes to personal tax thresholds
•Adjustments to dividend and capital gains taxReforms in how HMRC approaches SME compliance
We recommend reviewing your tax position now, especially if you’re due for a company year-end or dividend distribution.
Final Word from Demsa
The headline in this UK Financial Update June 2025 may be economic uncertainty, but that doesn’t mean inaction.
Staying alert, planning ahead, and having the right financial support can turn a slow market into an opportunity.
Need help reviewing your accounts, cash flow, or tax plans?
We’re here, ready when you are.
Get in touch today
For proactive, people-first accounting support across the UK.
