According to the Office for National Statistics, the British economy returned to growth in November, growing by 0.3 percent after contracting in the month before the autumn budget.
The rise in GDP exceeded economists’ expectations of a modest 0.1 percent rise and suggests economic activity has proved more resilient than many sentiment surveys had shown ahead of the November 26 Budget.
Growth in the three months to November also surprised on the upside, rising 0.1 percent, while forecast for a 0.2 percent decline after flat growth in October.
The recovery was driven by a recovery in the manufacturing and services sectors. Auto production saw a significant boost after Jaguar Land Rover restarted factory operations following a major cyberattack that disrupted production earlier this fall.
The services sector, which accounts for more than three-quarters of Britain’s economic output, grew 0.3 percent in November, after shrinking by the same amount in October. Professional, scientific and technical services led the recovery, posting a strong monthly increase of 1.7 percent.
Manufacturing output, including manufacturing, rose 1.1 percent for the month, while construction activity continued to weaken, falling 1.2 percent.
The latest figures suggest that uncertainty around the budget has had less of an immediate impact on actual output than business confidence indicators suggested, although economists point out that the overall economic picture remains fragile.
The UK economy has cooled after a relatively strong start to the year, a period when growth data has historically tended to be above average. However, analysts assume that the momentum could increase again in early 2026 if the environment stabilizes after the budget presentation.
Sanjay Raja, British economist at Deutsche Bank, said output would likely improve in the first quarter of 2026 as uncertainty eases. He said households were expected to slightly increase their spending at the start of the year, while investment in both the public and private sectors continued to show an upward trend.
City forecasters also expect inflation to fall back towards the Bank of England’s 2 percent target as early as April, potentially easing pressure on household budgets and creating scope for lower interest rates.
The Finance Ministry said the figures underlined the government’s efforts to reverse years of underinvestment, but acknowledged that further efforts were needed to sustain growth, reduce the cost of living and keep inflation under control.
