UK Modest GDP Growth Disappoints

(RTTNews) - The UK economy grew only marginally in November underpinned by the services sector, after two consecutive contractions, official data showed, which has strengthened the scope for more monetary policy easing from the Bank of England as inflation also softened unexpectedly at the end of 2024.

Gross domestic product edged up 0.1 percent on a monthly basis in November, following an unrevised fall of 0.1 percent in October, the Office for National Statistics reported Thursday. GDP was expected to grow 0.2 percent.

The services sector was the largest contributor to growth with output rising 0.1 percent. This follows a 0.1 percent fall in October.

The decline in industrial production softened to 0.4 percent from 0.6 percent. Within in this, manufacturing shrunk 0.3 percent compared to a 0.6 percent fall in October.

At the same time, construction grew 0.4 percent, partially offsetting the 0.3 percent decrease in October.

In November, GDP was estimated to be 1.0 percent higher than in November 2023. The actual growth was weaker than economists' forecast of 1.3 percent.

In the three months to November, real GDP registered no growth from previous three months.

Capital Economics economist Ashley Webb said it is clear that the economy has a bit less momentum than previously thought and there is still a risk that the economy contracted in the fourth quarter overall.

"With no growth in the three months to November 2024, and a very limited uptick for the month itself, it's clear that the UK economy continues to be stuck in a worrying rut," British Chambers of Commerce Research Manager Stuart Morrison said.

Another report from the ONS showed that the visible trade gap was largely unchanged in November. The visible trade deficit totaled GBP 19.31 billion compared to a GBP 19.33 billion shortfall in October. The surplus on trade in services increased to GBP 14.55 billion from GBP 14.31 billion. As a result, the total trade gap declined to GBP 4.75 billion from GBP 5.01 billion in the previous month.