Unexpected lift to November GDP eases UK recession risk
LONDON -Britain’s economy unexpectedly eked out some modest growth in November after a boost from World Cup drinkers and video game sales, reducing the chance that it has already slipped into recession, despite a gloomy broader picture for 2023.
Gross domestic product rose 0.1 percent in November from October, figures from the Office for National Statistics showed on Friday, stronger than the average forecast for a fall of 0.2 percent in a Reuters poll of economists.
During the three months to the end of November the economy shrank by 0.3 percent in line with economists’ forecasts, but this was driven by a 0.6-percent fall in output in September when many businesses closed to mark Queen Elizabeth’s funeral.
“The economy grew a little in November with increases in telecommunications and computer programming helping to push the economy forward. Pubs and bars also did well as people went out to watch World Cup games,” ONS statistician Darren Morgan said.
The stronger-than-expected November growth means there will need to have been a fairly sharp fall in output in December for Britain to record the two consecutive negative quarters of GDP which are commonly used as a definition of recession in Europe.
The ONS said December’s GDP would need to drop by about 0.5 percent for fourth-quarter growth to be negative when rounded to one decimal place, assuming no other revisions.
“The UK economy is doing its best to avoid falling into a technical recession with another month of growth in November … (but) it doesn’t change the fact that it is likely to be an extremely painful year for the economy,” said Ed Monk, associate director at Fidelity International.
Consumer price inflation hit a 41-year high of 11.1 percent in October and the squeeze on living standards has yet to ease, while the government’s budget watchdog forecast in November that output would fall by 1.4 percent in 2023.
Finance minister Jeremy Hunt said after the GDP data that “the most important help we can give is to stick to the plan to halve inflation this year so we get the economy growing again”.
