Thu, 16 Jan 2025

UK economy disappoints despite return to growth

Official figures show the economy grew by 0.1% in November, although that was lower than had been expected.

* The UK economy grew by 0.1% in November, marking its first increase in three months.
* However, the growth was less than expected and driven mainly by trade in pubs, restaurants, and construction.
* Despite the small increase, the Office for National Statistics (ONS) estimates that the economy showed no growth over the three months to November.
* The Chancellor, Rachel Reeves, admitted that the government needs to do more to stimulate economic growth, which is crucial for boosting living standards.
* Prime Minister Sir Keir Starmer said growing the economy takes time but expressed optimism about the return to growth in November.
* Business leaders and economists expressed concerns about the sluggish growth figures, with some warning of a "mood of caution" settling over UK businesses.
* The ONS attributed the marginal growth to construction and services sectors, while production declined across several manufacturing industries.
* The economy is expected to face further challenges due to tax rises coming into effect in April and rising minimum wages.
* Long-term government borrowing costs remained stable following the data release, but the pound fell against the dollar.
* Investors are now betting on an interest rate cut from the Bank of England next month.
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