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The UK economy beat expectations to grow 0.3 per cent in November, in a rebound from the previous month’s contraction that was propelled by growth in the services sector.
Thursday’s monthly GDP figure from the Office for National Statistics surpassed the 0.1 per cent increase forecast by economists polled by Reuters and the 0.1 per cent decline in October.
The figure for September was revised up to 0.1 per cent growth from initial estimate of a 0.1 per cent fall.
The government has made growth the centrepiece of its economic agenda, but the economy has lost momentum since the 0.7 per cent expansion recorded in the first quarter of 2025, a figure that was boosted by a flurry of activity in anticipation of Donald Trump’s tariffs.
Growth has since been weighed down by geopolitical uncertainty, elevated borrowing costs, disrupted auto production and anticipation of tax-raising measures in chancellor Rachel Reeves’ November Budget.
But Thursday’s data showed signs of an uptick. In the three months to November, a less volatile measure, the economy grew by 0.1 per cent, beating expectations of a 0.2 per cent contraction.
Liz McKeown, a director at the Office for National Statistics, said that the figure for the three months to November had been driven by growth in the services sector, though this was partially offset by a fall in manufacturing.
Construction registered the largest three-monthly fall since March 2023.
A spokesperson for the Treasury said that the government was working to reverse “years of underinvestment” as well as “taking action to get bills and inflation down . . . to deliver an economy that works for working people”.
In December, the Bank of England expected no growth in the final quarter of 2025 after a marginal 0.1 per cent increase in the three months to September.
The BoE estimated that policies announced in the Budget, including U-turns on welfare cuts and the two-child benefit cap, could increase GDP by about 0.1 to 0.2 per cent over the next few years, but that tax rises will weigh on growth beyond that.
Deutsche Bank economist Sanjay Raja said he expected stronger growth at the start of 2026 despite the fragile labour market and global uncertainty, supported by expected higher household spending and lower debt-servicing costs.