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Britain's economy grew 0.1% in November, weaker than analysts expected but still the fastest since August as Chancellor Rachel Reeves seeks to restore confidence in her fiscal and economic plans.
Data released by the Office for National Statistics on Thursday showed the monthly figure was below the 0.2% growth forecast by economists polled by Reuters and followed a 0.1% contraction in October and September.
The economy expanded in November, led by the main services sector, which grew by 0.1%, offsetting a 0.3% contraction in manufacturing. The construction sector increased by 0.4% in November, following a 0.3% decrease in October.
Thursday's figures will not allay concerns about the performance of the UK economy, as concerns about stagflation – slowing growth is accompanied by persistent price pressures – contributed to a sharp rise in borrowing costs at the start of the year. .
“This disappointingly slow recovery in growth in the UK economy is unlikely to ease stagflation concerns,” said Suren Tiloo, economics director at the Institute of Chartered Accountants in England and Wales. “It is unlikely that the November rally caused a more pronounced improvement in economic activity for the entire fourth quarter.”
The GDP figures follow official data released on Wednesday, which showed that inflation unexpectedly fell to 2.5% in December from 2.6% the previous month.
In the three months ending in November, the economy recorded no growth compared to the previous three months. Production was also flat in the third quarter, slowing significantly from the previous quarter's 0.4% increase. The growth rate from January to March last year was 0.7%.
“I am determined to move even faster to accelerate economic growth, which is a top priority in our transformation plan,” Reeves said after Thursday's data release.
In December, the Bank of England predicted there would be no growth in the final three months of the year, downgrading the 0.3% growth forecast in November.
The BoE left interest rates unchanged at 4.75% last month after cutting borrowing costs twice in 2024. Markets largely expect the central bank to cut interest rates by a quarter of a percentage point in February.
The pound has fallen more than 2% against the dollar this year, but was little changed at $1.221 after the data was released.
Experts polled by the Financial Times predict the UK economy will outperform France and Germany, but Mr Reeves' plans to increase national insurance contributions for employers could have a negative impact on the labor market. I warned you that there is. The prime minister announced an increase in the October budget, but it will not come into effect until April.
