The British economy performed slightly better than expected in November, not dispelling fears of an economy teetering on the brink of recession, registering a slight increase for the second month in a row.
Britain’s gross domestic product (GDP) rose 0.1% in November, following a 0.5% rise in the previous month.
But looking at the three months to the end of November together, the economy shrank by 0.3% compared with the previous three months, the Office for National Statistics (ONS) said in a report on Friday.
The economy benefited in November from the good health of the “telecommunications and computer programming” sector, but “pubs and bars” as “people went out to watch World Cup matches”, summarized Director of Economic Statistics Darren Morgan. ONS on Twitter.
On the other hand, parts of the manufacturing sector, particularly pharmaceuticals, transport and the post office, have contracted over time, with “the impact of the strikes to some extent” affecting these sectors, Mr. Morgan noted.
Britain’s economy suffered a particularly deep downturn in September due to a national holiday for Queen Elizabeth II’s funeral, contributing to a three-month drop in gross domestic product, the ONS said.
Economists expect GDP to contract slightly in November, while many forecasts, including those by the Bank of England, confirm the country is already in recession.
According to one of the classic definitions, a recession requires two consecutive quarters of decline in GDP, and British GDP fell by 0.3% in the third quarter.
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A slight increase in November may be too small to change the situation for the fourth quarter: “A rise of 0.1% on a monthly basis strongly resembles stagnation rather than real growth,” reckons Sophie Lund-Yates, analyst at Hargreaves Lansdowne.
“There is still a strong sense that the UK will soon officially enter recession”, and after spending in the run-up to Christmas, he warns, “there is now a real risk of consumers tightening their belts”.
“While the economy was better than expected in November, the data (published by the ONS on Friday) cannot mask underlying problems”, as British businesses are also concerned, the CBI, the main British employers’ body, underlined.
High inflation is “severely affecting household budgets” and putting “extreme cost pressures” on businesses, affecting “consumer spending and investment plans,” which are falling, according to the organization.
“The question for the government now is not whether we will fall into recession, but how long and how severe it will be,” the CBI said.
“The country must stick to its plan to halve inflation this year so that the economy can resume its growth,” British Chancellor of the Exchequer (Finance Minister) Jeremy Hunt promised in a press release.
The government has clamped down on energy bills especially this winter, while increases in electricity and gas prices are helping to fuel inflation, which is close to 11% in the country, fueling a severe cost-of-living crisis.
But according to the British Chambers of Commerce (BCC), “to return to long-term growth, businesses need to see the removal of trade barriers, particularly with the EU, investment in public infrastructure and measures to improve access to suitably qualified workers”.
This article was published automatically. Sources: ats / awp / afp
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