Services output grew by 0.1% in November after falling by 0.1% in October, revised lower from no growth, but showed no growth in the three months to November, the ONS said.
Production output fell by 0.4%, following October’s fall of 0.6%. It was down by 0.7% in the three months to November, driven by a decline in manufacturing.
Construction output grew by 0.4% in November, following a fall of 0.3% in October (revised up from a fall of 0.4%); construction also grew by 0.2% in the three months to November.
The chancellor, Rachel Reeves, said:
I am determined to go further and faster to kickstart economic growth, which is the number one priority in our Plan for Change.
That means generating investment, driving reform and a relentless commitment to root out waste in public spending, and today I will be pressing regulators on what more they can do to deliver growth.
After fourteen years of economic stagnation, this government’s number one mission is to grow our economy. I will fight every day to deliver that growth and put more money into working people’s pockets.
The UK economy economy returned to growth in November, driven by the service industry, albeit at a slightly slower rate than expected.
GDP rose by 0.1%, according to the Office for National Statistics, while economists had expected 0.2% growth. In October, GDP fell by 0.1%.
The economy stagnated in the three months to November compared with the three months to August.
Housing sales have picked up and prices are now rising in every region of the UK, according to a survey.
A net balance of +7% of surveyors reported higher sales growth in December, up from +1% in November, according to the Royal Institution of Chartered Surveyors. Enquiries from new buyers were also up, though at a slower rate than in November and October.
New instructions, which measures properties placed for sale, saw a bounce, ahead of stamp duty changes in March, with a net balance of +14% reported, marking the sixth consecutive month of increases in houses being listed for sale.
House prices are now going up in every region of the UK. Northern Ireland and Scotland report the strongest price growth currently.
In the lettings market, tenant demand has stabilised. Surveyors and estate agents expect further rent rises (+37%), as more landlords are selling up (net balance +37% from +29% in November) leading to a lack of properties for renters. So while demand is broadly flat, supply is diminished, leading to a lack of available property to rent and price rises.
RICS chief economist, Simon Rubinsohn, said:
The latest results from the RICS Residential Market Survey points to a further improvement in sentiment in the housing market despite concerns about the potential impact of rising bond yields on borrowing costs. Buyer enquiries rose once again, albeit at a slower pace than in November, and the headline price indicator also moved higher.
More significantly, the signals from the survey around expectations over the next twelve months also remain solidly positive for now. However, the resilience of the uplift in market mood could be tested if the mortgage rates do begin to climb in a material way over the coming months. That, critically, would also be a concern for developers who will want to see a solid market as a backdrop for ramping up housebuilding to help meet the government’s ambitious 1.5 million homes target for this parliament.
An unexpected drop in December inflation, announced yesterday, has taken some of the pressure off Rachel Reeves, the chancellor, raising expectations for a Bank of England rate cut next month, and reducing UK borrowing costs.
After a tough week for the government on the economy, official figures showed inflation unexpectedly cooled in December to 2.5%, down from 2.6% in the previous month, meaning prices rose at a slower rate.
Lifting some of the pressure on the chancellor as she sought to talk up Labour’s growth agenda, the latest snapshot sent the yield – in effect the interest rate – on UK government bonds tumbling at the fastest rate since 2023.
With 10-year gilt yields falling by almost 0.2 percentage points to about 4.7%, the sharp decline erased nearly all of the increase of the past seven days, when turmoil in the bond market had forced Reeves to contemplate spending cuts to meet her fiscal rules.
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The UK economy is expected to have returned to growth in November, following two consecutive months of contraction.
Economists are forecasting a 0.2% rise in GDP, when the Office for National Statistics releases its latest economic snapshot at 7am GMT. In each of October and September, the economy shrank by 0.1%. November’s annual growth rate is expected to remain steady at 1.3%.
Michael Field, European equity strategist at Morningstar, said:
With growth expected to improve further in 2025, this lays a positive backdrop for UK equities.
Some sectors of the UK economy are clearly struggling, such as manufacturing and particularly areas like chemicals, as they are grappling with high energy prices relative to the US, making them less competitive. The danger is that US tariffs could also worsen the situation for exporters.
Interest rate cuts are the carrot for UK businesses, with insolvencies at 30-year highs as the effect of elevated debt service costs bite.
We’ll also be getting data for trade, manufacturing and industrial production in Britain.
The Agenda
-
9am GMT: Italy trade for November and final inflation for December
-
9.30am GMT: Bank of England credit conditions survey
-
10am GMT: Eurozone trade for November
-
1.30pm GMT: US retail sales for December and initial jobless claims for latest week
This post was originally published on here
