United Kingdom GDP per capita (USD)

Economic activity growth slows in November

GDP rose 0.1% month-on-month in seasonally-adjusted terms in November (October: +0.5% mom). November’s reading was driven by a slowdown in the services sector and a contraction in manufacturing. However, the GDP figure was above market expectations, supported by a strong performance from the food and beverages subsector–which was in turn boosted by the FIFA World Cup.

On a rolling quarterly basis, GDP fell at a softer rate of 0.3% in September–November (August–October: -0.4% qoq).

Taken together, the October–November data bodes well for the Q4 GDP outturn, and suggests activity is holding up despite elevated inflation and interest rates. That said, the economy likely still registered a contraction in December as a result of strike disruption.

On the outlook, the EIU said:

“Even if the UK avoids a recession when fourth-quarter GDP data are published, we continue to believe that the economic outlook in 2023 is weak relative to European peers. This is due to the UK’s overreliance on private consumption for growth, which will be affected by declining consumer spending. With the outlook for manufacturing remaining weak, we forecast that full-year GDP will contract in 2023.”