UK economy returns to growth in November

(Sharecast News) - The UK economy returned to growth in November, according to figures released on Friday by the Office for National Statistics. GDP grew by 0.3% following a 0.3% contraction in October. This was ahead of economists' expectations of a 0.2% expansion.

The ONS said most of the growth was down to the services sector, which expanded 0.4% in November, having shrunk 0.1% in October.

In the three months to November, however, GDP was estimated to have fallen by 0.2% on the previous three-month period. Economists were expecting a 0.1% drop.

ONS chief economist Grant Fitzner said of the latest data: "The economy contracted a little over the three months to November, with widespread falls across manufacturing industries, which were partially offset by increases in public services, which saw less impact from strike action.

"GDP bounced back in the month of November, however, led by services with retail, car leasing and computer games companies all having a buoyant month.

"The longer-term picture remains one of an economy that has shown little growth over the last year."

Ruth Gregory, deputy chief UK economist at Capital Economics, said the rebound in real GDP in November probably means the economy escaped a recession in 2023.

"And with rates for new mortgages now falling and lower market interest rates creating more room for tax cuts, the risks to our 2024 GDP growth forecast of 0.0% are to the upside," she said.