As 2025 draws to a close, City AM invites readers to test their grasp of a tumultuous year in economics with our exclusive end-of-year quiz. The first full calendar year under a Labour government has presented significant challenges, making it a pivotal period to review.
A Year of Economic Turbulence and Scrutiny
The UK's economic landscape in 2025 has been far from straightforward. The unemployment rate has climbed to 5.1 per cent, marking a concerning upward trend. Inflation proved stubborn, consistently overshooting the Bank of England's two per cent target and squeezing household budgets.
Economic activity was largely sustained by two key factors: companies rushing to 'front-load' their operations ahead of anticipated tariffs from President Trump's administration, and elevated government spending during the earlier months of the year. This created a fragile foundation for growth.
Key Pressure Points and Political Crosshairs
Financial markets experienced notable volatility. Bond markets twitched nervously, wage growth saw unexpected surges, and business investment remained hesitant and wavering. The rapid ascent of Artificial Intelligence (AI) became a dominant theme, unsettling investors, creating scepticism among white-collar professionals, and generating excitement—and perhaps overpromises—from politicians.
The year was characterised by dramatic swings: busts and booms, policy U-turns, and occasional follow-throughs. Business sentiment, as captured by various surveys, oscillated between surprising highs and record lows, reflecting the profound uncertainty.
Central banks, including the Bank of England, faced more intense scrutiny than in previous years. Issues ranging from cryptocurrency volatility and quantitative tightening to debates over financial deregulation placed Governor Andrew Bailey directly in the crosshairs of critics from across the political spectrum, from Chancellor Rachel Reeves to Reform UK's Nigel Farage.
Institutions and an Uncertain Future
The very framework of UK economic oversight has been questioned. After 15 years of evaluating government fiscal policy, the future of the Office for Budget Responsibility (OBR) is now under review, raising questions about independent scrutiny.
Amidst what has been endlessly described as a climate of 'geopolitical uncertainty', 'macroeconomic challenges', and 'financial instability', City AM's quiz serves as a vital tool to reflect on these momentous twelve months. It covers the fiscal problems, monetary risks, price vulnerabilities, and market weaknesses that have defined this highly uncertain period.
How well do you recall the details of this consequential year? Take the quiz to challenge your understanding of the events that shaped the UK economy in 2025.
