UK economy grew in November despite recession predictions

The increase comes despite forecasts of a UK recession in 2023

The UK's economy grew by 0.1 per cent between October and November despite recession predictions.

The Office for National Statistics (ONS) recorded a slowdown in growth after a 0.5 per cent increase in the previous month.

Analysts had predicted the economy would shrink by 0.3 per cent for November.

ONS director of economic statistics, Darren Morgan, said pubs and bars were among the strong performers as people flocked to watch football World Cup games.

“The economy grew a little in November, with increases in telecommunications and computer programming helping to push the economy forward,” Mr Morgan said.

“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.”

Chancellor Jeremy Hunt said: “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.

“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.”

Output in consumer-facing services grew by 0.4 per cent in November 2022, following growth of 1.5 per cent, revised up from a growth of 1.2 per cent, in October 2022.

Production output decreased by 0.2 per cent in November 2022, after a fall of 0.1 per cent in October 2022 while manufacturing was the main driver of negative production growth in November 2022. This was partially offset by a positive contribution from the mining and quarrying sector.

Britain's labour market remains tight, with many workers having taken early retirement and companies struggling to hire staff to fill vacancies.

Another quarter of economic decline would put the economy into recession for the first time since the pandemic, the ONS said.

Economists have suggested that the latest data makes it less clear whether the UK will have entered a recession at the end of last year.

Kitty Ussher, chief economist at the Institute of Directors, said: “This is stronger activity than was expected for November and so will further contribute to the improvement in market sentiment we have seen in the last few weeks.

“Given we know the economy also grew in October - albeit driven by a rebound from the period of state mourning - it is no longer certain that the economy will meet the technical definition of a recession when the final data for 2022 is in.”

It comes as inflation started to cool in November, dropping to 10.7 per cent from a 41-year-high of 11.1 per cent a month earlier, and it is expected to drop further through 2023.

Rachel Reeves, Labour's shadow chancellor, said: “Today's results are just another page in the book of failure that is the Tory record on growth.

“The news of further economic pain will be deeply concerning to families already struggling with the soaring cost of living.”