UK economy grew 0.1% in November

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Britain’s economy grew 0.1 percent in November, beating analysts’ expectations but still marking the first expansion since August as Chancellor Rachel Reeves tries to restore confidence in her fiscal plans.

The monthly figure was below the 0.2 percent increase forecast by economists polled by Reuters and follows contractions of 0.1 percent in October and September, according to data released on Thursday by the Office for National Statistics.

November’s expansion was led by the dominant services sector, which rose 0.1 percent and offset a 0.3 percent contraction in manufacturing.The construction sector rose 0.4 percent in November, following a 0.3 percent decline in October.

Thursday’s data will not allay concerns about the performance of the UK economy after fears of stagflation, with sluggish growth accompanied by persistent price pressures, fueled a sharp rise in borrowing costs at the start of the year.

Liz McKeown, Director of Economic Statistics at the ONS, said: “The economy remains broadly flat, growing slightly in November after two small declines in previous months.”

The GDP data follows official data released on Wednesday that showed inflation unexpectedly fell to 2.5 percent in December from 2.6 percent the previous month.

In the three months ending in November, the economy did not grow compared to the previous three months. Output was also flat in the third quarter, slowing sharply from 0.4 percent growth in the previous quarter.

After the data was released on Thursday, Reeves said: “I am determined to go faster and faster to kick-start the economic growth that is the number one priority of our Agenda for Change.”

In December, the Bank of England said it expected no growth in the final three months of the year, down from a 0.3 percent expansion forecast in November.

The BoE left interest rates unchanged at 4.75 percent last month after cutting borrowing costs twice in 2024. Markets widely expect the bank to cut rates by a quarter point in February.

Experts polled by the FT expect the UK economy to outperform France and Germany, but warned that Reeves’ plans to increase employers’ national insurance contributions could hurt the labor market :