The UK economy returned to growth in November, expanding by 0.3 per cent after contracting in the month leading up to the autumn budget, according to figures from the Office for National Statistics.
The increase in GDP exceeded economists’ expectations of a modest 0.1 per cent rise and suggests that economic activity proved more resilient than many sentiment surveys had indicated in the run-up to the budget on 26 November.
Growth over the three months to November also surprised on the upside, rising by 0.1 per cent, compared with forecasts of a 0.2 per cent contraction, following flat growth in October.
The rebound was driven by a recovery in manufacturing and services. Car production provided a notable boost after Jaguar Land Rover restarted factory operations following a major cyber attack that had disrupted output earlier in the autumn.
The services sector, which accounts for more than three-quarters of UK economic output, expanded by 0.3 per cent in November after shrinking by the same amount in October. Professional, scientific and technical services led the recovery, recording a strong 1.7 per cent monthly increase.
Production output, including manufacturing, rose by 1.1 per cent over the month, while construction activity continued to struggle, contracting by 1.2 per cent.
The latest figures suggest that uncertainty surrounding the budget had less immediate impact on actual output than business confidence indicators had implied, although economists caution that the broader economic picture remains fragile.
The UK economy has cooled after a relatively strong start to the year, a period when growth data has historically tended to outperform. However, analysts believe momentum could pick up again in early 2026 as the post-budget environment stabilises.
Sanjay Raja, UK economist at Deutsche Bank, said output in the first quarter of 2026 was likely to improve as uncertainty fades. He said households were expected to increase spending modestly at the start of the year, while investment across both the public and private sectors remained on an upward trend.
City forecasters also expect inflation to fall back towards the Bank of England’s 2 per cent target as early as April, potentially easing pressure on household budgets and creating scope for lower interest rates.
The Treasury said the figures underlined the government’s efforts to reverse years of underinvestment, while acknowledging that further work was needed to sustain growth, tackle the cost of living and keep inflation under control.
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UK economy returns to growth with 0.3% expansion in November
