UK economy unexpectedly grows in November as services activity strengthens

ITV News' Ben Chapman looks at why the UK economy unexpectedly grew in November last year

The UK economy unexpectedly grew in November and reduced the risk of the country entering a recession, according to official figures.

The Office for National Statistics (ONS) recorded an increase of 0.1% as the services sector remained in growth despite the soaring cost of living.

Experts at the ONS said the slight rise was supported by the technology sector and a strong showing by pubs and bars amid a boost from the winter World Cup in Qatar.

It nevertheless represented a slowdown in growth after GDP increased by 0.5% in October.

Analysts had predicted the economy would shrink by 0.3% for November, with the UK economy having been widely expected to contract.

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But the services sector, which includes industries such as hospitality, was the biggest driver of growth that month, somewhat offsetting the decline seen in some manufacturing industries.

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 last 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.”

Having hit an eye-watering 41-year high of 11.1% in October, inflation is already predicted to have passed its peak as official figures revealed it fell significantly to 10.7% in November.

It was the biggest drop for 16 months and came after big falls in the price of petrol and diesel, as well as second-hand cars.

For many, the cost of living will still feel painful, with prices of many essentials expected to remain high for some time as under-pressure firms are forced to pass on steep costs.

Responding to the ONS figures, Chancellor of the Exchequer Jeremy Hunt said: “We have a clear plan to halve inflation this year – an insidious hidden tax which has led to hikes in interest rates and mortgage costs, holding back growth here and around the world.

“To support families through this tough patch, we will provide an average of £3,500 support for every household over this year and next – but the most important help we can give is to stick to the plan to halve inflation this year so we get the economy growing again.”