Restaurants and pubs on James Street in London, UK, on Friday, Dec. 13, 2024.
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The U.K. economy grew by a more-than-expected 0.3% in November, data from the Office for National Statistics showed Thursday.
Economists polled by Reuters had expected a very modest growth figure of 0.1%.
The latest data comes after the economy contracted unexpectedly by 0.1% in October, a figure that was attributed to the ongoing fallout of a cyber-attack at Jaguar Land Rover, which affected car production, and consumer and business uncertainty in the run-up to the Autumn Budget.
Economists expect the U.K. economy to improve in 2026, particularly as the Bank of England is likely to continue on its interest rate-cutting path.
“Looking ahead, we expect GDP to rebound strongly in the first quarter of 2026,” Sanjay Raja, chief U.K. economist at Deutsche Bank, said in emailed comments this week.
“Survey data are already improving as the dust on the Budget settles and there are tentative signs that the labour market may be stabilising,”
“We expect households to spend a little more to start the year, and investment to remain on an uptrend,” he added. Deutsche Bank expects that U.K. GDP growth this year will be slightly lower than in 2025 (seen at 1.1%) while it expects quarterly growth to track 0.35% quarter-on-quarter.
“There are more downside risks to our growth projection, given the vulnerabilities in the labour market,” Raja cautioned, however.
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