The UK Economy Grew 0.3% In November, What Do The Experts Think?

Despite worries about the UK economy shrinking, new stats released yesterday revealed that it grew 0.3% after a 0.1% fall in October, according to the ONS.

The figures turned heads as they came in above expectations, with many expecting growth to be closer to 0.1%.

And while the growth has been celebrated, many have been quick to point out that it is largely due to an increase in car production, as well as a rise in services like tax and accounting ahead of the Autumn budget.

And economists have urged brits to stay cautious, saying that this rise isn’t necessarily an upward trend, but more likely a symptom of ‘catching up’ after pre-budget uncertainty. (BBC).

 

What The Numbers Show

 

ONS figures have come out showing that:

• GDP grew 0.3% in November
• Services output rose 0.3%
• Production output increased 1.1%
• Construction output fell 1.3%

The ONS also revised September’s figure to show 0.1% growth, rather than previous figures which suggested that the economy shrank that month. (Reuters).

Interestingly, one of the major contributors to November’s growth was Jaguar Land Rover, which continued production after it was hit by a cyberattack earlier in the quarter. ONS data shows that vehicle manufacturing rose over 25% in November, which had a strong impact.

 

Budget Uncertainty Played A Role

 

Just before the government’s Autumn Budget was announced, businesses were stuck between wanting to continue operations, but being unsure of what new changes were to come.

One sector that benefitted from this uncertainty was the services sector, which grew 0.3%. One of the biggest and most active areas of the services industry during this time was tax and accounting, which makes sense in a month when companies were preparing for (or reacting to) policy changes laid out in the budget.

 

A Gift For Reeves, But Does It Tell The Full Story?

 

Undoubtedly, Rachel Reeves will be happy to hear about the latest figures. Despite many warning that Labour’s tax hikes on businesses would slow the economy, she now has proof that it isn’t just running, it’s growing.

On the one hand, whilst many would argue it’s modest growth, others will say this is a sign that interest rates will definitely come down – something that will be positively felt by businesses and workers alike.

Many however have argued that the stats don’t show a real upwards trend, but are likely just a symptom of some anomalous months coming together.

 

 

What Do The Experts Think?

 

What do business leaders make of the stats? To find out, we asked them, here’s what they had to say:

 

Susannah Streeter, Chief Investment Strategist, Wealth Club

 

 

‘’November was always going to be an uphill struggle for the UK economy, but although activity was still super-sluggish the UK has not been completely defeated on its quest for growth. Output has surprised on the upside, with growth of 0.3% month on month. There will be sighs of relief in Downing Street that the economy has shown more resilience.

‘’The performance was helped by car manufacturing whirring back into life, with production returning to normal levels at Jaguar Land Rover following the devastating cyber-attack mid-way through the month. With Budget fears reaching panic attack levels for some sectors, it’s not surprising that many battened down the hatches and held off from making big investments. Marketing budgets seem to have been hit, with a 1.3% fall in advertising and market research. Real estate activities also declined 0.4%, as worries bubbled about changes to stamp duty. Consumers worried about where tax rises may fall, also retreated from spending which meant it was a tough time for the hospitality sector during the month. It was still a bleak performance from the construction sector, where activity shrank 1.3% and was also revised lower in October, denting the government’s ambitions for a housebuilding revolution.

‘’However other companies ploughed on, undeterred by Budget worries in projects aimed at longer term growth, such as scientific research and development, which grew 4.5%. There was also a trend of expansion in computer programming and hiring consultants. It’s likely to be linked to advancements in artificial intelligence, with companies anxious not to be left behind. This helped boost the information and communication sector by 1.5%.’’

 

Rachel Watkyn OBE, CEO at Tiny Box Company

 

 

“The figures are yet to be adjusted for the fact that many businesses sought legal and financial advice pre budget to understand what they could be dealing with. Initial evidence suggests that many businesses sought advice on potential tax changes to dividends, capital gains tax etc in order to potentially move money before the budget was announced. There’s been no adjustment to the output figures to reflect for example that car production restarted where it had been stopped in previous months. After 3 months of pent up car demand this would have meant inflated figures on the previous quarter.

“If we were to look at the real indicators like unemployment which has been rising steadily, and the retail figures that appeared to dip dramatically as soon as the budget was announced (why would they announce the budget Black Friday week) then we’d probably see a very different story. Did they delay the budget on purpose to bluster the figures to ensure a higher quarter? This quarter will probably be far more telling as we approach more increases in minimum wage, higher business rates and general uncertainty due to the number of government Uturns. Also, the 0.3% growth wasn’t growth it was rebound from previous dips, so again crowd-pleasing headlines rather than the truth.”

 

George Holmes, Business Finance Specialist at Aurora Capital

 

 

“That 0.3% uptick is a welcome sign that the economy is still moving, and for small businesses, any growth beats another month of stagnation. It should help confidence, especially for customer-facing firms that rely on households feeling secure enough to spend.

“But SMEs should not read this as a broad-based recovery. The headline rise was helped by a rebound in manufacturing output, particularly a surge in car production following earlier disruptions, while construction activity declined again. Many small firms are more exposed to building work, local services and everyday customer spending than to big shifts in manufacturing

“Policymakers can’t treat one decent month as a mission accomplished; small businesses will continue to face high borrowing costs, increasing tax bills, and cautious customers. They need steady conditions and better access to finance so they can invest when demand improves, and ultimately help drive further growth in the months to come.”

 

Angela Hodgson, Founder of Ignite Improvement

 

 

“The headline 0.3% growth will feel disconnected from reality for many SME leaders. On paper, growth suggests momentum. On the ground, most founders I work with are still navigating tight margins, cautious customers, rising costs and stretched teams.

“For SMEs, the challenge isn’t ambition, it’s capacity. Many businesses want to invest, innovate and scale, but are constrained by people pressure rather than ideas. Productivity isn’t being held back by a lack of technology or effort, it’s being limited by overloaded teams, unclear priorities and leaders carrying too much decision-making alone.

“Where I do see optimism is in SMEs that are focusing on how work actually flows through their business. The businesses responding best to slow growth are simplifying, clarifying roles, investing in leadership capability and building teams that can adapt quickly. They’re not waiting for economic conditions to improve, they’re improving how they operate.

“If the UK wants sustainable growth beyond small quarterly uplifts, SMEs need support that goes beyond funding announcements. Investment in leadership, skills and team effectiveness is what turns economic signals into real results. Growth doesn’t come from working harder, it comes from building organisations that work better.”

 

Rose Gibson, Founder of Baby Beats

 

 

“A 0.3% growth headline might sound reassuring but for many SMEs it doesn’t reflect the reality on the ground. Growth at a national level doesn’t automatically translate into breathing space for small businesses with rising costs, shrinking margins and increasing pressure on energy and cash flow.

“As a founder running a people led, community based business, I see first hand how fragile growth can feel when venue hire, travel, outsourcing and insurance continue to rise faster than revenue. Many SMEs aren’t lacking ambition or ideas they’re battling sustainability.

“What this modest growth does is highlight the importance of adaptable business models. For me, the focus isn’t aggressive expansion at all costs but smarter growth: accessible training, in person connection, diversified income streams and models that allow others to build sustainable businesses without excessive risk.

“Economic growth figures matter but so does who gets to participate in that growth and whether it’s actually sustainable for the people building it.

“The real question is where this growth is coming from and who it’s actually benefitting? A 0.3% increase does little to bridge the widening gap between rising operational costs and the lived reality of SMEs trying to stay afloat.”

 

Gary Ross, Founder & CEO at Blip Insurance

 

“0.3% is better than going backwards but no one is going to be celebrating this. What we’re seeing at blip insurance is that most small businesses are under serious pressure from all fronts. Costs have only increased since COVID, their profit margins are razor thin, and they are struggling to build any cash reserves in case things go wrong – which they inevitably do! In saying this, what also clearly stands out is tough and resilient small businesses are. Despite this slow economic growth and everything else that is thrown at them, they are still here. This matters. This is a reflection of the strength of the small business owners that are the bedrock of the economy.

“Small business owners will not be feeling confident with this low level growth. They will likely hold off on extensive hiring, or investing at a large scale, because their cash flow simply won’t stretch to it

“If we actually want the economy to pick up properly, small businesses need more than a headline number. They need things that make day-to-day life less expensive and less complicated – simpler rules, easier access to funding, insurance and services that don’t rip them off just because they’re small.”

 

Josh Cobb, Director at Jefferson Communications

 

 

“As a small business owner in the City of London the slow economic growth does not inspire confidence. Under Labour the economy feels grinding, with small businesses the cogs requiring greasing with better economic opportunity and more capital.

“Communications is an essential tool for businesses to navigate markets, regulatory environments, and media, so there is always opportunity for work, but even corporate entities are today pinching the pennies and budgets keep getting trimmed.

“This is exemplified with less long-term commitment in favour of short-term projects, an over-exaggeration of KPIs to justify the spend, and greater demand for higher quality results within shorter timelines. But this is the same regardless of industry; times are tough for small businesses in the UK. What’s clear though, is that we’re used to it!

“The highly competitive life of small business is one of struggle and fight, but that’s not stopped the agencies in our circle – if anything, everyone’s putting in a greater shift than ever! Labour needs to make entrepreneurial decisions more financially rewarding to stimulate small business growth. Clients need to be confident in their suppliers. Small businesses need to stay focussed and not let macro-economic statistics dampen their fight.”

 

Jarek Sklodowski, Head of UK Trading at Financial Markets Online

 

 

“It’s too soon to talk of the UK economy turning a corner. At a headline level, things are no longer getting worse – and that counts as progress.

“The bigger than expected expansion in November has dragged the quarterly growth figures back into positive territory – just.

“Britain’s carmaking industry has recovered to the levels seen before last year’s catastrophic cyberattack on Jaguar Land Rover, but the lion’s share of the credit for today’s uptick in GDP lies with the UK’s dominant services sector, which grew by 0.2% over the quarter and 0.3% over the month of November.

“But elsewhere performance is poor. Construction output sank by 1.1% in the three months to November, the sharpest downturn in two and half years. Housebuilding continues to slide, on both a monthly and quarterly basis, and the FTSE-listed Taylor Wimpey announced that it expects its operating margins to shrink further this year.

“Building sites are the photo opp of choice for Chancellors keen to crow about economic growth, but Rachel Reeves may get a frosty reception if she dons a hard hat and boots today.

“With unemployment at 5.1%, its highest level in four years, Britain’s economy is far from out of the woods and UK stock markets are now likely to take a breath after the FTSE 100 hit a record high this week.

“With inflationary pressure easing as many of the cheap Chinese goods that would have gone to the US are diverted to other markets like the UK, the Bank of England will have a freer hand to cut interest rates further this year.

“While a base rate cut next month is unlikely, no-one should think that today’s welcome jump in GDP will cool the Bank’s desire to provide further monetary stimulus in the coming months.”

 

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