T
he UK economy was revealed to have grown by 0.1 per cent in November, a better than expected performance which has raised hopes that Britain may narrowly avoid sliding into recession.
The official GDP figures released by the Office for National Statistics on Friday morning beat analysts’ expectations who had predicted a fall of 0.3 per cent.
With both Tesco and Marks & Spencer recording bumper Christmas trading figures on Thursday, Britain’s economy may be showing greater resilience than predicted in the face of the cost of living crisis.
A recession is defined as two quarters or more in a row of falling output. With GDP falling by 0.3 per cent between July and September, economists widely expected a similar fall in the final quarter of 2022 – despite a 0.5 per cent rise in October. In the three months from September to November, the economy still contracted by 0.3 per cent.
ONS Director of Economic Statistics Darren Morgan said: “The economy grew a little in November with increases in telecommunications and computer programming helping to push the economy forward. Pubs and bars also did well as people went out to watch World Cup games.
“This was partially offset by further falls in some manufacturing industries, including the often-erratic pharmaceutical industry, as well as falls in transport and postal, partially due to the impact of strikes.
“Over the last three months, however, the economy still shrank – mainly due to the impact of the extra Bank Holiday for the Funeral of Her Majesty Queen Elizabeth in September.”
The Bank of England has predicted the UK would officially enter recession when figures for GDP in December are released next month and then remain in recession throughout 2023.
But while Friday’s figures are a slowdown on October’s 0.5 per cent growth, that was largely due to comparisons with September’s figures which were hit by the bank holiday for the funeral of Queen Elizabeth II.
It will offer a glimmer hope to businesses and households which have faced a major squeeze as energy bills and food prices rise and interest rates are hiked to tackle inflation.
The improved performance by the economy could reduce pressure on the Bank to keep hiking interest rates. The base rate is already at 3.5 per cent, raising mortgage rates for millions of homeowners.
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