UK economy rebounded in November — but we’re not out of the woods yet

After shrinking in October, the UK economy staged a modest rebound in November, expanding by 0.3% according to the Office for National Statistics. The stronger-than-expected figure offered some relief after a difficult autumn, but analysts warned it remains a short reprieve in an otherwise stagnant year.

The November upturn followed a 0.3% contraction the previous month — meaning much of the apparent growth simply made up for lost output. Economists said the rise was less a sign of new momentum than a reflection of earlier disruptions easing, including the resumption of vehicle production after September’s cyberattack at Jaguar Land Rover and renewed activity in professional services once fiscal uncertainty cleared.

Services output, which accounts for about three-quarters of UK GDP, rose by 0.3% on the month, recovering from October’s dip. The ONS highlighted renewed strength in professional, scientific, and technical services — such as accounting and research and development — alongside a modest rise in information and communications activity. Retail trade was largely flat.

Manufacturing also saw a notable lift as industrial output normalised. Vehicle production, a key contributor to the rebound, returned to expected levels following stoppages earlier in the autumn. However, production across other industrial segments remained subdued, and construction continued to drag on growth, falling again in November as investment and infrastructure work slowed under high financing costs.

ONS director of economic statistics Darren Morgan said the rebound reflected “a bounce-back in car manufacturing and professional services after falls in October,” but emphasised that “the economy has shown little growth overall in recent months.”

That view was echoed across financial markets. The pound and gilt yields barely moved in response to the data, with investors focusing instead on the Bank of England’s forecast for near-zero growth in the final quarter of 2025. The central bank has signalled it expects only minimal expansion until interest rates begin to fall later this year.

Rachel Reeves, the Chancellor, described the figures as “evidence that the economy is turning a corner,” though most economists remain cautious. Capital Economics’ senior economist Ruth Gregory said, “The rebound in November should not be mistaken for momentum. The economy remains fragile, and with inflation pressures still present, growth is likely to stay close to zero into early 2026.”

On an annual basis, GDP was 1.4% higher than a year earlier, but the three-month rolling measure rose just 0.1% — confirming that Britain remains near stagnation despite isolated monthly gains. The underlying picture, economists say, is one of an economy adjusting to high borrowing costs, cautious investment, and lingering weakness in consumer spending.

November’s figures may prevent the UK from slipping into a technical recession, but the longer trend is harder to disguise. This is a pause in the decline, not a reversal — a reminder that short-term growth can mask longer-term fragility when output gains come from recovery rather than renewal.