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United Kingdom GDP November 2021

United Kingdom: Economic activity expands at fastest pace since June in November

GDP grew 0.9% month-on-month in seasonally-adjusted terms in November (October: +0.2% mom), well above market expectations of 0.4% growth. The print marked the best result since June, and meant the economy is now back above its pre-pandemic level. Looking at the details of the release, November’s pickup was broad-based, with the services, manufacturing and construction sub-sectors all accelerating. Strong retail sales and Covid-19-related health spending boosted services output, while reduced material shortages aided construction.

On a rolling quarterly basis, GDP rose at a quicker rate of 1.1% in September–November (August–October: +0.9% qoq).

That said, the surge in Covid-19 cases due to Omicron and the ensuing slight tightening of restrictions and staff shortages bode ill for activity in December and heading into early 2022.

Analysts at Goldman Sachs commented:

“Following [the] strong data, we have revised up our Q4 GDP growth estimate by 0.3pp to 1.2%. We have lowered our December growth projection slightly on the heels of softening incoming indicators and our estimated impact from the introduction of ‘Plan B’ restrictions, despite a likely meaningful boost from adjustments around the NHS Test and Trace and vaccinations programmes.”

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