Weak November weighs on UK progress

The UK’s economic system grew by simply 0.1% within the three months to November, in line with the Workplace for Nationwide Statistics.

Development was barely stronger in September and October than beforehand thought, however fell 0.3% in November, dragging down the three-month determine.

The ONS mentioned progress within the economic system year-on-year was at its lowest for the reason that spring of 2012.

Development in development was offset by a weakening service sector, whereas manufacturing was “lacklustre”.

The figures come amid rising hypothesis that the Financial institution of England’s Financial Coverage Committee (MPC) could also be making ready to chop rates of interest sooner fairly than later.

The pound dropped 0.6% in early buying and selling after one other Financial institution policymaker, Gertjan Vlieghe, mentioned he would vote for an interest rate cut this month until financial information confirmed good progress for the UK.

What occurred within the three-month interval?

The determine of 0.1% progress was higher than anticipated, mentioned analysts.

ONS head of GDP Rob Kent-Smith mentioned: “Total, the economic system grew barely within the newest three months, with progress in development pulled again by weakening providers and one other lacklustre efficiency from manufacturing.

“The UK economic system grew barely extra strongly in September and October than was beforehand estimated, with later information portray a more healthy image.”

The revised ONS figures now present progress of 0.1% in every of these two months.

What occurred in November?

Within the month of November, GDP fell by 0.3%, which was worse than anticipated.

The ONS mentioned the November decline was pushed by falls in each providers and manufacturing.

“Within the month of November, progress in providers was -0.3%, following an upwardly revised progress of 0.3% in October 2019,” it added.

“Small will increase throughout a small variety of industries had been greater than offset by comparatively giant falls in a number of different industries, most notably scientific analysis and improvement, and wholesale commerce, which every took 0.07 proportion factors off month-to-month gross home product (GDP) progress.”

What are commentators saying?

“Immediately’s information confirmed that the UK economic system remained within the doldrums final autumn,” mentioned John Hawksworth, chief economist at PwC.

“All of this information, nonetheless, pertains to a interval of heightened financial and political uncertainty final autumn as a result of Brexit and the overall election.

“It’s too early to say for positive if financial momentum will choose up within the new yr now the political scenario is clearer, however our newest survey of the monetary providers sector with the CBI does counsel some enhance to optimism for the reason that election.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, mentioned: “The newest GDP information are nowhere close to as horrendous as they seem initially. The sharp fall in November has adopted upwardly revised progress within the earlier two months.

“As well as, practically all of November’s fall in GDP was attributable to non permanent weak spot within the manufacturing and distribution sectors.”