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The UK economy rebounded more than expected in November driven by growth in the services sector, according to official figures that ease fears of a technical recession.
Gross domestic product grew 0.3 per cent month on month in November, following a 0.3 per cent contraction the previous month, according to data published by the Office for National Statistics on Friday. That was stronger than the 0.2 per cent expansion forecast by economists polled by Reuters.
Services output grew 0.4 per cent and was the main contributor to the monthly growth. Production output grew 0.3 per cent, while the construction sector fell 0.2 per cent.
Commenting on the GDP figures for the three months to November, ONS chief economist Grant Fitzner said: “GDP bounced back in the month of November . . . led by services with retail, car leasing and computer games companies all having a buoyant month.”
“The longer-term picture remains one of an economy that has shown little growth over the last year,” he added.
The UK economy marginally contracted in the three months to September, and November’s data raise hopes it will avoid shrinking in the final quarter of 2023. Some economists define two consecutive quarters of economic contraction as a technical recession.
The economy largely stagnated through last year, reflecting the impact of high prices and borrowing costs on household finances and business activity. In November output was only 0.2 per cent up from the same month in 2022.
Jeremy Hunt, the chancellor, said: “While growth in November is welcome news, it will be slower as we bring inflation back to its 2 per cent target. But we have seen that advanced economies with lower taxes have grown more rapidly, so our tax cuts for businesses and workers put the UK in a strong position for growth into the future.”
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