UK economy grew by 0.3% in November, beating forecasts

The UK economy saw a faster-than-expected growth of 0.3% in November, driven by a rebound in car production and a boost in the services sector. The Office for National Statistics (ONS) reported that industrial output increased, with Jaguar Land Rover’s facilities resuming production after a cyber-attack.

The Budget on 26 November also contributed to the growth, particularly in services such as accounting and tax consultancy. Economists were pleased with the November figures, although they anticipated moderate growth in the future.

Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, noted that most sectors had overcome pre-Budget uncertainty. He expected the UK economy to grow modestly in the final quarter of 2025.

The ONS reported a stronger growth figure for November, surpassing analysts’ expectations of a 0.1% increase. September’s growth figure was revised up to 0.1%, indicating a more positive trend in the economy.

The three-month data showed a 0.1% growth in the economy compared to the previous quarter. The continued pick up in Jaguar Land Rover production contributed to a 25.5% increase in motor vehicle output in November.

A Treasury spokesperson highlighted the government’s efforts to make the economy work for working people by investing in infrastructure and implementing planning reforms. However, the shadow chancellor, Mel Stride, expressed concerns that economic growth was stagnant.

Yael Selfin, chief economist at KPMG UK, noted that economic activity had accelerated despite uncertainty before the Budget. She anticipated positive growth in the first three months of the year, driven by business investment and government spending.

Construction output fell by 1.3% in November, but Ruth Gregory, deputy chief economist at Capital Economics, believed it was likely to rebound in December. However, she cautioned that the increase in services output might be a temporary rebound rather than a sign of fundamental strength in the economy.

Deutsche Bank’s chief UK economist, Sanjay Raja, suggested that the economic data could deter a February interest rate cut from the Bank of England. The economy’s firmer footing indicated a lower urgency for rate cuts.

Overall, the UK economy showed signs of recovery in November, with various sectors contributing to growth. Despite challenges, there were positive indicators for future economic performance.