UK monthly GDP data for November

Britain’s economy grew by a mediocre 0.1% in November, data from the Office of National Statistics (ONS) showed on Thursday, fueling expectations that the Bank of England would cut interest rates. interest rate next month.

The latest data released compares with monthly growth of 0.2% expected by economists polled by Reuters.

Real monthly gross domestic product (GDP) fell 0.1% in October, following a decline of 0.1% in September and growth of 0.2% in August.

The ONS said the slight growth in economic output in November was largely due to growth in the services sector. Although meager, this data represents the first sign of life in the wider British economy in three months.

British Chancellor Rachel Reeves said in a statement Thursday after the data was released that she was “determined to go further and faster to revive economic growth.”

“That means generating investment, driving reforms and a relentless commitment to eliminating waste in public spending, and today I will put pressure on regulators on what more they can do to generate growth ” she said in comments emailed to Treasury.

The ONS nevertheless said real GDP would have shown no growth in the three months to November, compared to the three months to August.

“Services showed no growth over the three-month period, while production fell 0.7% and construction rose 0.2%,” » said the ONS in releasing the data.

THE Pound sterling fell 0.2% against the dollar to trade at $1.2214 following the GDP release, which comes as the Bank of England considers whether to cut interest rates during its next meeting on February 6.

Economists say the latest data only fuels the case for a rate cut next month, although BoE policymakers will take into account inflationary pressures, such as the resilience of wage growth and uncertainty over the UK economic outlook. The central bank’s inflation target is 2%.

“Alongside December’s weaker-than-expected CPI inflation figures, today’s statement revealed that the economy continued to show little momentum towards the end of last year, leaving us satisfied with our view that the Bank of England will cut interest rates from 4.75% to 4.50% in February,” Ashley Webb, UK economist at Capital Economics, said in an emailed note.

The Labor government and Treasury have been under pressure in recent weeks due to rising government borrowing costs, questions over their budget plans and rising tax pressure on businesses.

Both received a respite on Wednesday, however, when the latest inflation data showed that consumer price growth slowed more than expected to 2.5% in December, with a further slowdown of basic price growth.

This figure is lower than the expectations of economists polled by Reuters, who predicted that the inflation rate would remain unchanged from November’s figure of 2.6%.

Core inflation, which excludes more volatile food and energy prices, stood at 3.2% in the twelve months ended December, up from 3.5% in November.

The UK’s inflation rate hit its lowest level in more than three years at 1.7% in September, but monthly prices have accelerated since then due to rising fuel costs and prices. services. In December, the annual inflation rate for services stood at 4.4%, compared to 5% in November.

The UK economy has found itself in dire straits of late, with economists expressing concerns about the situation. the country’s sluggish growth outlook and concerns about headwinds caused by both external factors, such as potential tariffs once President-elect Donald Trump takes office on Jan. 20, as well as budget challenges and internal economic issues which have dogged the Labor Government and the Treasury since the October Budget.

“Near stagnation in GDP in November dampened optimism over yesterday’s unexpected drop in inflation. Meanwhile, the widening trade deficit highlights the ongoing challenges facing UK businesses as they face an increasingly complex global landscape,” Samuel Edwards, director of trading with global financial services company Ebury, said in emailed comments Thursday.

“The new US administration brings both opportunities and challenges. Although uncertainty over policy direction persists, some are optimistic that closer trade ties could unlock significant potential in one of the largest markets in the UK,” he noted.

The government’s efforts to strengthen ties with the EU and China, Edwards noted, “reflect a clear strategy to diversify export opportunities and build long-term economic resilience.”

Correction: The title of this article has been updated to reflect the UK economy growing by 0.1% in November. A previous version had incorrectly stated the figure.