The UK economy returned to growth in November after a recovery in consumer spending driven by Black Friday sales, with shoppers hunting for bargains as the key Christmas shopping season got under way.
Gross domestic product rose by 0.3% on the month, after a decline of 0.3% in October, according to the Office for National Statistics (ONS). City economists had forecast more modest growth of 0.2%.
Grant Fitzner, the ONS chief economist, said the bounceback was fuelled by the country’s dominant services sector, with retail, car leasing and video 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,” he said.
Figures this week showed that some of Britain’s largest retailers recorded a bumper Christmas shopping season, helped by growth in online orders and high demand for festive food and drink, despite subdued demand for costlier items such as furniture and electrical goods.
The ONS said services output grew by 0.3% in November, reversing a fall in October after strikes in the health service and education had hit activity. Production output – which includes manufacturing and energy generation – also returned to growth, while activity in the construction sector slumped by 0.2%.
Over the broader three month-period to the end of November, GDP was estimated to have fallen by 0.2%, reflecting the pressure on households amid the cost of living crisis.
Yael Selfin, the chief economist at the accountancy firm KPMG UK, said the overall outlook remained “gloomy”, while a technical recession remained a possibility for the second half of 2023.
“Even if the economy manages to avoid a recession, it is expected to remain in stagnation territory,” she said.
The latest figures come amid growing expectations the Bank of England will cut interest rates this year as inflation continues to fall back from the highest level in four decades. Official figures due next week are expected to show inflation cooled in November from 3.9% in October, although households remain under significant pressure as prices remain high.
The chancellor, Jeremy Hunt, said it was welcome news that growth returned in November but cautioned that it would remain slow while inflation continued to fall back.
“We have seen that advanced economies with lower taxes have grown more rapidly, so our tax cuts for businesses and workers put the UK in a strong position for growth into the future,” he said.
https://news.google.com/rss/articles/CBMibWh0dHBzOi8vd3d3LnRoZWd1YXJkaWFuLmNvbS9idXNpbmVzcy8yMDI0L2phbi8xMi91ay1lY29ub215LXJldHVybnMtdG8tZ3Jvd3RoLWFtaWQtYmxhY2stZnJpZGF5LXNwZW5kaW5nLWxpZnTSAW1odHRwczovL2FtcC50aGVndWFyZGlhbi5jb20vYnVzaW5lc3MvMjAyNC9qYW4vMTIvdWstZWNvbm9teS1yZXR1cm5zLXRvLWdyb3d0aC1hbWlkLWJsYWNrLWZyaWRheS1zcGVuZGluZy1saWZ0?oc=5
2024-01-12 11:51:26Z
CBMibWh0dHBzOi8vd3d3LnRoZWd1YXJkaWFuLmNvbS9idXNpbmVzcy8yMDI0L2phbi8xMi91ay1lY29ub215LXJldHVybnMtdG8tZ3Jvd3RoLWFtaWQtYmxhY2stZnJpZGF5LXNwZW5kaW5nLWxpZnTSAW1odHRwczovL2FtcC50aGVndWFyZGlhbi5jb20vYnVzaW5lc3MvMjAyNC9qYW4vMTIvdWstZWNvbm9teS1yZXR1cm5zLXRvLWdyb3d0aC1hbWlkLWJsYWNrLWZyaWRheS1zcGVuZGluZy1saWZ0
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