UK Politics

The UK economy grew by 0.1% in November, reversing a 0.1% drop in the previous month, and easing some of the pressure on the chancellor, Rachel Reeves.

The rise in activity was weaker than forecast, with Reeves acknowledging it would take time to revive the UK economy.

City economists had forecast that GDP would rise by 0.2% in November, with some warning that November’s growth was weak, making an interest rate cut by the Bank of England next month more likely.

UK government borrowing costs dipped after the data was released, which will increase the chances that Reeves does not breach her fiscal rules. On Wednesday, bond yields dropped at the fastest rate since 2023 after UK inflation eased, in another fillip for the chancellor.

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Simon Pittaway, a senior economist at the Resolution Foundation, said the GDP data was disappointing, raising fears of stagnation, despite a welcome return to growth. “In recent years the UK has been a growth rollercoaster, with a recession in late 2023 followed by a bounce back in early 2024. But its longer-term record is one of economic stagnation, and that is where Britain risks returning to.

“The paltry GDP growth late last year reinforces the need for the government’s economic plans to start bearing fruit.”

The ONS’s 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.”