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The UK economy grew 0.1 percent in November, beating analysts’ expectations but still posting the first expansion since August.
The monthly figure was below the forecast of 0.2 percent growth by economists polled by Reuters and followed a 0.1 percent decline in October and September, according to data released by the Office for National Statistics on Thursday.
Data released on Thursday will not allay concerns about the performance of Britain’s economy after fears of stagflation, in which sluggish growth is accompanied by persistent price pressures, contributed to a sharp rise in borrowing costs at the start of the year.
This follows official data released on Wednesday showing an unexpected drop in inflation to 2.5 percent in December from 2.6 percent in the previous month.
The economy failed to grow in the three months ending in September, slowing sharply from 0.4 percent growth in the previous quarter. Growth was 0.7 percent between January and March last year.
In December, the Bank of England said it expected no growth in the final three months of the year, down from the 0.3 percent growth forecast in November.
The BoE left interest rates unchanged at 4.75 percent last month after cutting borrowing costs twice into 2024. Markets largely expect the bank to cut the benchmark rate by a quarter of a point in February.
Experts polled by the FT expect Britain’s economy to outperform France and Germany, but warn that Reeves’ plans to increase employers’ National Insurance contributions could damage the labor market. The chancellor announced an increase in the budget for October, but it will only come into force in April.
This is a developing story
