8:29 am, January 13, 2023
The risk of the country entering a recession has been reduced after the UK economy unexpectedly grew in November.
The Office for National Statistics (ONS) recorded a rise of 0.1 per cent as the services sector continued to grow in spite of the soaring cost of living. Analysts had predicted the economy would shrink by 0.3 per cent.
ONS experts said the slight rise was aided by the tech sector plus a strong showing by pubs and bars amid a boost from the winter World Cup.
However, it was still a slowdown in growth after October’s 0.5 per cent rise in GDP.
ONS director of economic statistics Darren Morgan said: ‘The economy grew a little in November, with increases in telecommunications and computer programming helping to push the economy forward.
‘Pubs and bars also did well as people went out to watch World Cup games.
‘This was partially offset by further falls in some manufacturing industries, including the often-erratic pharmaceutical industry, as well as falls in transport and postal, partially due to the impact of strikes.
‘Over the past three months, however, the economy still shrank – mainly due to the impact of the extra bank holiday for the funeral of Her Majesty Queen Elizabeth in September.’
Consumer-facing industries were the biggest growth driver of the month, witnessing a 0.4 per cent increase amid a lift from higher food and drink sales during the World Cup.
The service sector also grew by 0.2 per cent as more punters visited pubs and other venues, although this was still a slowdown from the 0.7 per cent rise a month earlier.
In November, the construction sector saw growth fall away as it stayed flat for the month after October’s 0.4 per cent rise.
Elsewhere, manufacturing was the main cause of a 0.2 per cent decline in the production sector for the period.
The ONS added that GDP still contracted by 0.3 per cent over the three months to November despite the latest growth.
The economy also declined by 0.3 per cent in the third quarter of 2022 and would therefore enter a technical recession if another fall is recorded for the final quarter.
Kitty Ussher, chief economist at the Institute of Directors, said: ‘This is stronger activity than was expected for November and so will further contribute to the improvement in market sentiment we have seen in the last few weeks.
‘Given we know the economy also grew in October – albeit driven by a rebound from the period of state mourning – it is no longer certain that the economy will meet the technical definition of a recession when the final data for 2022 is in.’
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