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UK economy expands faster than forecast in November
The UK's economy grew by 0.3% in November, exceeding analysts' expectations, as car manufacturing rebounded and the services sector gained momentum, official figures show.
Key drivers behind the growth
The Office for National Statistics (ONS) attributed the upturn to a rise in industrial output, particularly in motor vehicle production. Jaguar Land Rover (JLR) resumed operations after a cyber-attack forced a month-long shutdown in September, contributing to a 25.5% surge in car output for November.
Services also saw an increase, with accounting and tax consultancy activities benefiting from pre-Budget preparations ahead of the government's fiscal statement on 26 November.
Economists react to the figures
While the November data surpassed the 0.1% growth forecast, economists cautioned that the overall outlook remains subdued. Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, described the figures as "unexpectedly upbeat," suggesting most sectors had moved past pre-Budget uncertainty.
"November's uptick means it's inevitable that the UK economy grew modestly across the final quarter of 2025, with easing uncertainty post-Budget likely supporting December's performance-despite disruptions from the 'super flu' in sectors like education."
Suren Thiru, ICAEW
Yael Selfin, chief economist at KPMG UK, noted that businesses had delayed decisions ahead of the Budget but saw tentative signs of rising household spending. She expects growth to continue, driven by business investment and government expenditure.
Construction sector struggles amid wet weather
Construction output fell by 1.3% in November, marking its largest three-month decline in nearly three years. Ruth Gregory, deputy chief economist at Capital Economics, linked the drop to "unseasonably wet weather" but predicted a rebound in December.
Despite the November rebound, Gregory warned that the services sector's growth merely offset earlier losses, suggesting the economy's underlying strength remains uncertain.
Political and financial market reactions
A Treasury spokesperson said the government was addressing economic challenges by reversing "years of underinvestment" in infrastructure and reforming planning rules. The spokesperson acknowledged ongoing cost-of-living pressures but stressed progress in reducing bills and inflation.
Shadow chancellor Mel Stride criticised the government's record, arguing that tax increases and failure to control benefits had stifled growth.
"The chancellor promised growth as her top priority, but the economy is still flatlining due to misguided policies."
Mel Stride, Shadow Chancellor
Financial markets adjusted expectations for interest rate cuts, with Deutsche Bank's chief UK economist Sanjay Raja suggesting the stronger-than-expected data reduced the urgency for a February rate reduction by the Bank of England.
Broader economic context
The ONS revised September's growth estimate upward to 0.1%, from an initial contraction of 0.1%. However, the three-month rolling GDP data-considered a more reliable indicator-showed growth of just 0.1% in the quarter to November.
