The UK economy performed more strongly than anticipated in November last year, according to the latest official figures. Data released by the Office for National Statistics (ONS) revealed that gross domestic product (GDP) increased by 0.3% during the month. This represents a notable rebound from a revised 0.1% decline recorded in October.
Services and Manufacturing Drive Unexpected Uptick
The November growth figure surpassed the predictions of most economists, who had forecast a more modest 0.2% rise. Earlier in the week, a Bloomberg poll had even suggested the possibility of zero growth before revising its estimate upwards. The expansion was primarily fuelled by the dominant services sector, which grew by 0.3% and accounts for roughly 80% of the UK's economic output. There was also a significant boost from manufacturing, which saw a robust 2.1% uplift.
Liz McKeown, Director of Economic Statistics at the ONS, commented on the figures. "The economy grew slightly in the latest three months, led by growth in the services sector, which performed better in November following a weak October," she stated.
Annual Context and Future Headwinds
The ONS data provides a snapshot of an economy experiencing fluctuating growth throughout 2025. The year began strongly, with GDP expanding by 0.7% in the first quarter. This early pace was attributed in part to businesses investing ahead of anticipated tariffs from the Trump administration and pre-April tax changes. However, momentum slowed considerably, with growth dropping to 0.2% in Q2 and 0.1% in Q3.
Analysts warn that the road ahead may be challenging. Martin Beck, chief economist at WPI Strategy and a former Treasury analyst, noted that the November rise helped offset two prior months of decline. He highlighted significant fiscal drag, stating, "Tax rises announced by both the current government and its predecessor mean the UK faces the largest discretionary fiscal tightening in the G7 this year, according to the IMF."
Cautious Optimism Amid Underlying Challenges
The Treasury responded to the data by reaffirming its investment strategy. A spokesperson said the government was focused on making the economy work for working people by "protecting record infrastructure investment, driving through major planning reform, backing expansion at Heathrow and Gatwick, delivering Northern Powerhouse Rail and getting Sizewell C built."
However, business leaders urge caution. Louise Hellem, chief economist at the Confederation of British Industry, described any growth upgrade as a signal for "cautious optimism" rather than a "cause for celebration." She pointed to persistent barriers to private sector growth, including regulatory burdens, high taxation, and soaring energy costs. Similarly, Simon French of Panmure Liberum warned of the risk that public sector spending could be "crowding out" private firms.
Looking forward, economists project lower growth for the upcoming year compared to 2025, with forecasts from major City institutions ranging between 0.7% and 1.4% for the full year. While potential interest rate cuts may offer some relief, the government has recently shifted its communications focus towards the "cost of living" over pure economic growth, highlighting efforts to ease inflation and provide extra welfare support.
The ONS is expected to publish its preliminary estimate for economic growth over the entire 2025 calendar year next month, once the December GDP figures are finalised.
