What does the pledge mean?

The UK is one of seven advanced economies considered part of the ‘G7’ group. The others are Canada, France, Germany, Italy, Japan and the United States. 

The main measure of economic growth globally is Gross Domestic Product (GDP). In the UK, this is generally expressed as ‘economic output’—the value of goods and services produced during a given period. UK data is released by the Office for National Statistics (ONS), which also publishes international comparisons of the UK’s real GDP growth alongside other G7 countries. 

The ONS releases GDP data monthly, quarterly and annually, and publishes international comparisons quarterly and annually. 

How much control a government has over its country’s GDP is debatable. While government policies can certainly influence economic growth, GDP growth can depend on a wide range of other factors, such as geopolitical developments or even the weather. 

As we’ve written previously, ahead of the election the Prime Minister Sir Keir Starmer expressed an ambition for the UK’s annual GDP growth to reach 2.5%.

A very similar pledge also appeared in the government’s “Plan for Change”, launched on 5 December 2024. In it, the government said it would “aim to deliver the highest sustained growth in the G7”, rather than “secure”, as was the wording in the manifesto. This was interpreted by some to represent a weakening of the original pledge, which the government denies. 

Labour’s manifesto didn’t specify what timeframe it expects to deliver this pledge within, or what it means by “sustained” growth. We asked the Treasury about this in October and November 2024, and again in March 2025, when it directed us to then-Treasury minister Tulip Siddiq’s answer to a question about the Plan for Change, in which she said: “We aim to have the highest growth in the G7 by the end of the parliament, measured using estimates of real terms Gross Domestic Product per capita”. 

This correlates with what Labour said in a document published in 2023, that the party would “measure the annual rate of GDP per capita growth compared to other countries”, and that the “ambition” was to “have the highest growth in the G7 over consecutive years by the end of the parliament”. However, when we’ve asked about the manifesto pledge since the election, the government hasn’t confirmed what “sustained” means, or if annual or quarterly data will be used, so we’re not sure if the parameters set out in 2023 still hold.

GDP per capita, or per head, is considered an indicator of economic welfare, because, as the ONS says, “the volume of goods and services available to the average person is a proxy for a country’s living standards”. However, the OECD says that “a better picture of people’s economic well-being” is real household income per capita.

In December 2024, the government announced a separate pledge on living standards, as part of its Plan for Change, which we’re also monitoring.

The OECD measures real GDP per capita by dividing GDP by mid-year population. GDP per capita and GDP growth rates can differ. For example, the ONS notes that in recent years growth per head has slowed “as the population has increased at a faster rate than the volume of output produced”. 

What progress has been made?

So far we only have comparative data on real GDP growth per capita (the metric the government has said it is using) broadly covering the first quarter of Labour’s time in office (Q3 2024).

By this measure, in Q3 2024 the UK had the second lowest growth in the G7, of -0.19%. The G7 average was 0.36%. 

As a result, we’ve marked this pledge as “Appears off track”. It’s possible that, over the coming months or years, the UK’s growth per capita will end up consistently higher than other G7 nations, either in quarterly or annual data, but this is not the case so far.

A more common measure of a country’s economic performance is overall GDP growth, which the OECD says is “the single most important indicator to capture economic activities”. We have comparative GDP growth data for this measure that broadly covers Labour’s first two quarters in government—July to September 2024 (Q3 2024), and October to December 2024 (Q4 2024).

The UK’s GDP grew by 0.4% in April to June 2024, just before Labour entered government.

In Q3 2024, the UK’s economy shrank by 0.03%, or 0.0% when rounded to one decimal place—thus, the ONS says the UK saw “no growth” in Q3 2024. 

That represented the lowest level of GDP growth in the G7, according to OECD data. The United States’ GDP grew by 0.76% compared to the previous quarter, Canada by 0.55%, France by 0.41%, Japan by 0.36%, and Germany’s GDP grew by 0.11%. Italy’s GDP broadly saw no growth, as was the case for the UK, though the unrounded figures show Italy was actually ahead of the UK, with its GDP increasing by 0.01% while the UK’s fell by 0.03%. 

Initial estimates suggest that in Q4 2024, Labour’s second quarter in government, the UK’s economy grew by 0.1%. International comparisons show the UK had the fifth highest growth rate in the G7. Canada had growth of 0.65%, the US 0.58%, Japan 0.56%, Italy 0.14% and the UK had growth of 0.10%. Both France and Germany saw negative growth (-0.10% and -0.20% respectively). 

GDP data is subject to revision, so these figures may be revised at a later date.

While monthly comparisons among G7 nations are not currently available, it’s worth noting the latest monthly data estimates the UK economy shrank by 0.1% in January 2025, after it grew by 0.4% in December 2024.