The National Gallery and St Martin’s Church in the Fields at dusk. Trafalgar Square, London, UK
Stockcam | E+ | Getty Images
The UK economy grew at a weak 0.1% pace in November, data from the Office for National Statistics showed on Thursday.
That compares with the 0.2% month-on-month increase expected by economists polled by Reuters.
Real monthly Gross Domestic Product (GDP) fell 0.1% in October, following a 0.1% decline in September and a 0.2% increase in August.
The ONS said the slight increase in economic output in November was mainly due to growth in the services sector. While thin, the data is the first sign of life in the wider UK economy for three months.
British Chancellor Rachel Reeves said in a statement after the data on Thursday that she was “determined to go further and faster to kick-start economic growth”.
“That means generating investment, driving reforms and a relentless commitment to rooting out waste in public spending, and today I will be pressing regulators on what more they can do to deliver growth,” she said. in the comments sent by email from the Treasury.
However, the ONS said real GDP is estimated to have shown no growth in the three months to November, compared with the three months to August.
“Services showed no growth during this three-month period, while manufacturing fell by 0.7% and construction increased by 0.2%,” the ONS said in the announcement.
of British pound It fell 0.2% against the dollar to trade at $1.2214 after the GDP print, which comes as the Bank of England considers whether to cut interest rates at its next meeting on February 6.
The Bank of England’s next move
Cooler-than-expected annual inflation for December on Wednesday fueled broad expectations of a 25-basis-point rate cut when the central bank meets.
Such a cut would bring the key interest rate from 4.75% to 4.5%, although BOE policymakers will factor in inflationary pressures such as resilient wage growth and uncertainty over Britain’s economic outlook. The central bank’s inflation target is 2%.
The Labor government and the Treasury have been under pressure in recent weeks amid rising government borrowing costs and questions over their fiscal plans and a higher tax burden on businesses. Both were given a break on Wednesday, however, when the latest inflation data showed that consumer price growth cooled more than expected to 2.5% in December, with core price growth slowing further.
The print was below the expectations of economists polled by Reuters, who had predicted that the inflation rate would remain unchanged from November’s 2.6% reading.
Core inflation, which excludes more volatile food and energy prices, fell to 3.2% in the twelve months to December, from 3.5% in November.
The UK inflation rate had hit a more than three-year low of 1.7% in September, but monthly prices had accelerated since then on higher fuel costs and the price of utilities. In December, the annual rate of inflation of services stood at 4.4%, from 5% in November.
The UK economy has found itself in a tight spot recently, with economists expressing concerns about the country’s sluggish growth prospects and worries about headwinds caused by both external factors, such as potential tariffs trade after President-elect Donald Trump takes office on January 20, along with domestic fiscal and economic challenges that have dogged the Labor government and the Treasury since October’s budget.
Correction: The headline of this article has been updated to reflect that the UK economy grew by 0.1% in November. An earlier version misstated the figure.
