The British economy grew by 0.1% in November

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Britain’s economy grew by 0.1 per cent in November, below analysts’ expectations, as Chancellor Rachel Reeves comes under increasing pressure to rebuild confidence in the government’s fiscal plans.

The monthly figure was below the 0.2 percent growth forecast by economists polled by Reuters, and comes after a 0.1 percent contraction in both October and September, according to data published by the Office for National Statistics on Thursday.

November’s expansion, the first since August, was led by the dominant services sector, which grew 0.1 percent and offset a 0.3 percent contraction in the manufacturing sector. The construction sector grew by 0.4 percent in November after a 0.3 percent contraction in October.

Thursday’s data will not dispel concerns about the bank’s performance UK economy After fears of stagflation – slow growth combined with persistent price pressures – contributed to a sharp rise in borrowing costs at the start of the year.

“This disappointingly modest return to growth in the UK economy is unlikely to ease stagflation fears,” said Suren Thero, director of economics at the Institute of Chartered Accountants in England and Wales. “The rise in November is unlikely to lead to a noticeable improvement in economic activity during the fourth quarter.”

The GDP figures follow official data released on Wednesday that showed an unexpected drop in inflation to 2.5 percent in December from 2.6 percent the previous month.

In the three months to November, the economy recorded no growth compared to the previous three months. Output was also flat in the third quarter, which represented a sharp slowdown from the 0.4 percent expansion in the previous quarter. Growth reached 0.7 percent between January and March last year.

Experts polled by the Financial Times expected the British economy to outperform France and Germany, but warned that Reeves’ plans to increase employers’ National Insurance contributions could harm the labor market. The Chancellor announced an increase in her budget for October, but it will not take effect until April.

After the data was published on Thursday, Reeves said: “I am determined to go further and faster to kick-start economic growth, which is the number one priority in our plan for change.”

In December, the Bank of England said it expected no growth in the final three months of the year, down from the 0.3 per cent expansion it expected in November.

The Bank of England left interest rates unchanged at 4.75 percent last month after cutting borrowing costs twice in 2024. Markets largely expect the bank to cut interest rates by a quarter of a percentage point in February.

The pound sterling, which has fallen more than 2 percent against the dollar this year, was little changed at $1.221 after the data was released.

British government bonds maintained their gains after Wednesday’s rise due to inflation data. There was little change in the 10-year yield at 4.73 percent in early trading.

Traders in swap markets have continued to price in at least two quarter-point rate cuts from the Bank of England this year, with an 80 per cent chance the first cut will come next month.