GDP inched forward by just 0.1% in November

The British economy returned to growth in November but fell disappointingly short of City forecasts in another blow to Rachel Reeves

GDP was up by just 0.1%, the first month of growth since August, according to latest figures from the Office for National Statistics (ONS). But City economists had pencilled in growth of 0.2% for the month that followed the Chancellor’s first Budget.

It follows two months of falling output in September and October that raised fears of a “technical recession” over the autumn and winter. GDP flatlined in the third quarter of the year after Labour’s election victory.

The ONS said that GDP had shown no growth in the three months to November.

The overall economy was saved from another fall by a 0.1% growth in output from the dominant services sector. But the production sector, which includes manufacturing, contracted by 0.4%, while construction output also fell by 0.4%

Chancellor Rachel Reeves said: “I am determined to go further and faster to kickstart economic growth, which is the number one priority in our Plan for Change.

“That means generating investment, driving reform and a relentless commitment to root out waste in public spending, and today I will be pressing regulators on what more they can do to deliver growth.

“After fourteen years of economic stagnation, this Government’s number one mission is to grow our economy. I will fight every day to deliver that growth and put more money into working people’s pockets.”

ONS director of economic statistics Liz McKeown said: “The economy continues to be broadly flat, having grown slightly in November following two small falls in the previous months.

“Services grew a little, with wholesaling, pubs & restaurants and IT companies all doing well, partially offset by falls in accountancy and business rental & leasing.

“Construction also grew, led by new commercial developments, while production continued to decline in November with further falls across a range of manufacturing industries and oil & gas extraction companies.”

Lindsay James, investment strategist at Quilter Investors, said“While the risk of recession remains modest for now, the UK is not yet out of the woods, and in the three months to November the economy flatlined.

“This weak growth can in part be attributed to the fallout of the government’s Budget, which saw consumers hit pause on spending. As we move further into this year we could see an even bigger impact.

“Businesses will soon feel the effects of increased national insurance contributions, the costs of which are likely to be passed on to employees. Wage growth is expected to take a hit, and spending could be dampened further as a result.”