UK economic growth slows to 0.1% in November - business live

GDP: The UK economy grew by 0.1% in November

Breaking: Britain’s economy grew slightly in November, better than City economists expected [they had forecast a 0.2% contraction].

The Office for National Statistics reports that UK GDP rose by 0.1% in November, down on the 0.5% growth recorded in October.

But “looking at the wider picture”, the ONS adds, GDP fell by 0.3% in the three months to November 2022.

Capital Economics’ senior UK economist, Ruth Gregory, says the UK may avoid a recession in 2022, thanks to the “undeniably encouraging” news that the economy grew slightly in November.

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The small 0.1% month-on-month gain in real GDP in November suggests the economy “was not as weak in Q4 as we had previously thought”, Gregory says. But 2023 will still be tough, she adds:

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But even if the economy does a bit better than expected in Q4, it is at best stagnating.

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And it is too soon to conclude the economy will be able to get through this period of high interest rates and high inflation largely unscathed. We still think a recession is on its way in the first half of 2023.

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Growth at telecommunications and computer programming companies helped the UK economy to expand, just 0.1%, in November, says ONS director of economic statistics Darren Morgan.

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Pubs and bars also did well as people went out to watch World Cup games, he explains, with England and Wales both playing in Qatar.

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But this was “partially offset” by further falls in some manufacturing industries, including the pharmaceutical industry (where output can be erratic).

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Strikes also hit the transport and postal sectors, Morgan says, adding:

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“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.”

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Commenting on today’s GDP figures, Darren Morgan said: (1/3)

⬇️ pic.twitter.com/ivYR1sEsgU

— Office for National Statistics (ONS) (@ONS) January 13, 2023

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Darren Morgan continued: (2/3)

⬇️ pic.twitter.com/ghX6AbpIYW

— Office for National Statistics (ONS) (@ONS) January 13, 2023

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Darren Morgan also said: (3/3)

⬇️ pic.twitter.com/g9dLabtuw8

— Office for National Statistics (ONS) (@ONS) January 13, 2023

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Jeremy Hunt, Chancellor of the Exchequer, says:

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“We have a clear plan to halve inflation this year – an insidious hidden tax which has led to hikes in interest rates and mortgage costs, holding back growth here and around the world.

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“To support families through this tough patch, we will provide an average of £3,500 support for every household over this year and next – but the most important help we can give is to stick to the plan to halve inflation this year so we get the economy growing again.”

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The UK’s services sector grew by 0.2% during November, with the men’s World Cup in Qatar providing a boost to pubs and bars, as supporters gathered to watch games.

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But manufacturing continued to struggle, with its output falling by 0.5%.

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The construction sector stagnated.

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GDP grew 0.1% in November with

▪️ services up 0.2%
▪️ manufacturing down 0.5%
▪️ construction flat (0.0%)

➡️ https://t.co/TbV9f82F6z pic.twitter.com/fqg8kNF4c6

— Office for National Statistics (ONS) (@ONS) January 13, 2023

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Here’s the details of how the UK economy performed in November, from the Office for National Statistics:

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The services sector grew by 0.2% in November 2022, after growth of 0.7% (revised up from a growth 0.6% in our previous publication) in October 2022; the largest contributions came from administrative and support service activities and information and communication.

Output in consumer-facing services grew by 0.4% in November 2022, following growth of 1.5% (revised up from a growth of 1.2% in our previous publication) in October 2022; the largest contribution to growth came from food and beverage service activities in a month where the FIFA World Cup started.

Production output decreased by 0.2% in November 2022, after a fall of 0.1% (revised down from flat in our previous publication) in October 2022; manufacturing was the main driver of negative production growth in November 2022, partially offset by a positive contribution from mining and quarrying.

The construction sector was flat in November 2022 after growth of 0.4% (revised down from growth of 0.8% in our previous publication) in October 2022.

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Breaking: the UK economy grew slightly in November, better than City economists expected [they had forecast a 0.2% contraction].

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The Office for National Statistics reports that UK GDP rose by 0.1% in November, a slowdown on the 0.5% growth recorded in October.

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But “looking at the broader picture”, the ONS adds, GDP fell by 0.3% in the three months to November 2022.

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Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

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We’re about to learn how well, or badly, the UK economy fared in November, as the recession looms.

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The Office for National Statistics is due to release its GDP monthly estimate for November at 7am. Economists predict the UK economy shrank by around 0.2% in November, after better-than-expected growth of 0.5% in October.

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A fall in GDP in November wouldn’t officially put the UK into a technical recession – defined as shrinking for two consecutive quarters – but it could signal that one is close.

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UK GDP did fall in the third quarter of 2022, by 0.3%, so a contraction in the October-December quarter would mean a recession (we’ll get Q4 data in a month’s time).

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Soaring energy prices have hit the economy, weakening consumer spending as the cost of living crisis left consumers with less to spend.

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Alvin Tan of RBC Capital Markets told clients:

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We expect that GDP contracted again in November.

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Retail sales have provided a good guide to the pattern of activity of late, and they fell by 0.4% m/m in November.

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UK monthly GDP on the cards in the session aheadhttps://t.co/LozYN9BJus

— ForexLive (@ForexLive) January 13, 2023

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Analysts at investment bank Nomura also predicted a month-on-month contraction in November, saying:

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“We think that GDP is due a fall bearing in mind the weaker surveys and higher inflation, and as such forecast a 0.3 per cent m-o-m drop in November.”

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UK housebuilders have warned this week that demand slowed last autumn, as the turmoil following the mini-budget.

“,”elementId”:”6a6c266b-6c15-4930-8e84-4fc2d5a81c75″},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2023/jan/11/barratt-hiring-freeze-uk-housing-market-slows-down”,”text”:”Barratt brings in hiring freeze as UK housing market slows down”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”e1eb354b-4e09-42ca-8611-93ea8ea9b4b4″},{“_type”:”model.dotcomrendering.pageElements.SubheadingBlockElement”,”html”:”

The agenda

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7am GMT: UK GDP report for November

7am GMT: UK trade report for November

9am GMT: Full Year GDP growth report for Germany

10am GMT: Eurozone trade balance for November

3pm GMT: University of Michigan index of US consumer sentiment

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Key events