The UK economy showed unexpected resilience in November, with stronger-than-forecast growth offering a boost to confidence.
The UK economy delivered a stronger-than-expected performance in November, with GDP (gross domestic product*) rising by 0.3% month on month, according to the Office for National Statistics (ONS). This was ahead of forecasts, which had predicted growth of around 0.1%, and has provided a modest boost to economic confidence.
The improvement was driven largely by stronger industrial output and a recovery in manufacturing activity. The services sector also made a positive contribution, with increased activity in areas such as accounting and tax consultancy ahead of the November Budget.
Economists have broadly welcomed the figures, noting that many sectors appear to have coped better than expected with uncertainty in the run-up to the Autumn Budget, unveiled on 26 November.
Easing uncertainty after the Budget is also thought to have supported activity into December.
Cautious optimism
Looking ahead, analysts remain cautiously optimistic but warns that a weakening labour market could weigh on future momentum if hiring slows, redundancies increase and wage growth softens.
There are, however, signs that conditions could improve for borrowers. Inflation is widely believed to have peaked and is expected to trend lower during 2026. Six base rate cuts since August 2024 have slightly eased the burden for many borrowers.
Cooling inflation and lower interest rates may encourage households with savings to spend more, helping to support economic growth. With Budget uncertainty now largely behind us, business confidence could also improve.
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*GDP measures the size of the economy, i.e. the total value of goods and services produced during a specific time period.