The UK economy saw a modest 0.1% growth in November, following declines in September and October, after finance minister Rachel Reeves’ budget with tax hikes.
Economists had expected a 0.2% increase. The budget included higher social security contributions from employers, and Reeves vowed to accelerate economic growth.
Despite the growth, there’s caution among UK businesses, with many focusing on cost-cutting, likely impacting hiring and investment. The Bank of England is expected to cut rates in February, but experts believe the outlook is brighter than current data suggests.
The services sector saw slight growth, while manufacturing and oil sectors struggled. While the UK economy flatlined in Q3 2024, increased government spending is expected to provide a short-term boost in 2025. Concerns over the economy contributed to rising government borrowing costs, though they recently fell after favorable inflation data.
Prime Minister Keir Starmer aims for the fastest GDP per capita growth among the G7 economies. Year-on-year, November’s growth was 1.0%, below the 1.3% economists had forecasted.
