The UK economy moved back into growth in November, expanding by 0.3 per cent after contracting in October, according to official figures that exceeded market expectations and eased fears of a deeper slowdown ahead of the autumn budget.
Data released by the Office for National Statistics showed economic output rose more strongly than the 0.1 per cent increase forecast by economists, suggesting activity proved more resilient than sentiment surveys had indicated in the run-up to the November 26 budget.
Growth over the three months to November also surprised on the upside, with GDP rising by 0.1 per cent. Analysts had predicted a contraction of 0.2 per cent following flat growth in October.
A key driver of the rebound was a recovery in car production after Jaguar Land Rover resumed operations at its factories, which had previously been forced to shut down following a major cyber attack.
The services sector, which accounts for more than three-quarters of the UK economy, grew by 0.3 per cent during the month after shrinking by the same margin in October. Professional, scientific and technical services led the expansion, recording a strong 1.7 per cent increase.
Production output, including manufacturing, rose by 1.1 per cent in November, while the construction sector continued to struggle, contracting by 1.2 per cent.
The figures suggest that concerns surrounding the budget weighed less heavily on real economic activity than previously feared, despite gloomy confidence readings from households and businesses.
Economists say the pace of growth slowed after a strong start to the year, a period when UK data has historically outperformed. However, analysts at Deutsche Bank believe momentum could pick up again in early 2026 as uncertainty around fiscal policy fades.
Sanjay Raja, UK economist at Deutsche Bank, said output in the first quarter of 2026 was likely to accelerate as households begin to spend more and investment remains on an upward trend across both the public and private sectors.
Inflation is also expected to fall back to the Bank of England’s 2 per cent target as early as April, according to City forecasters, potentially easing cost-of-living pressures and paving the way for lower interest rates.
The Treasury welcomed the data but acknowledged that further work lies ahead. A spokesperson said the government was focused on reversing years of underinvestment, driving sustainable growth, keeping inflation stable, and reducing borrowing costs to support working households.
