Chancellor Rachel Reeves received a dose of positive economic news today as official data revealed the UK economy returned to growth in November. The Office for National Statistics (ONS) reported that Gross Domestic Product (GDP) increased by 0.3% during the month, a figure that surpassed the expectations of most financial analysts.
Monthly Rebound Follows October Contraction
This uptick in economic activity provided a measure of relief after a disappointing performance in October, when output contracted by 0.1%. The stronger-than-anticipated November figures may help to alleviate some immediate political pressure on the Chancellor. However, economists note that this growth largely occurred before the Autumn Budget on November 26, a fiscal event where Ms Reeves announced a series of new tax measures.
Looking at the broader three-month picture, the economy just managed to enter positive territory in the period leading up to November. This followed a complete stagnation in the three months to October, indicating a fragile and inconsistent recovery.
Sector Performance: Services Lead, Manufacturing and Construction Struggle
Liz McKeown, Director of Economic Statistics at the ONS, provided a detailed breakdown of the figures. "The economy grew slightly in the latest three months, led by growth in the services sector, which performed better in November following a weak October," she stated.
This positive contribution from services, which forms the largest part of the UK economy, was partially counteracted by ongoing difficulties in other areas. Manufacturing output continued to be affected by the aftermath of a major cyber incident that disrupted car production earlier in the autumn. "However, data for the latest month show that this industry has now largely recovered," Ms McKeown added.
The construction sector presented a more worrying trend, contracting again and registering its largest three-monthly fall in nearly three years. This highlights specific sectoral headwinds that continue to challenge overall growth.
Government Response and Future Challenges
Responding to the statistics, a Treasury spokeswoman outlined the government's economic strategy. The statement emphasised reversing "years of underinvestment" through a series of measures including protecting infrastructure spending, major planning reforms, and backing airport expansion and major rail and nuclear energy projects like Sizewell C.
The spokeswoman also listed immediate cost-of-living actions, such as a £150 reduction on energy bills, freezes on rail fares and fuel duty, lifting the two-child benefit cap, and increasing the national living wage. "There's more to do," the statement concluded, acknowledging the ongoing challenges of "driving growth, delivering stability, keeping inflation low, tackling the cost of living and bringing our borrowing costs down."
While the November data offers a temporary reprieve, the mixed performance across sectors and the looming impact of recent fiscal policy mean the Chancellor's path to securing sustained economic growth remains complex.
