The Office for National Statistics (ONS) has estimated the economy grew by just 0.1% in November for the first time since August.
However, this growth is a lot weaker than what was expected which will be another blow for the Chancellor Rachel Reeves.
Many economists were expecting the gross domestic product (GDP) to grow by 0.2% in November.
During a visit to Ukraine the Prime Minister said, The figures out today are a step in the right direction, but there’s much, much more we’ve got to do and that we will do.
“We’re going to be unrelenting when it comes to driving our economy forward – changing the planning rules, changing regulation.”
The Chancellor said, “This new Government has come in with a determination, a number one mission, to grow the economy. That takes time.”
Economics Fellow at the Institute of Economic Affairs Julian Jessop said, “The latest monthly data suggest that the UK economy is sliding back into recession.
“GDP rose a measly 0.1% in November or, more precisely, just 0.07%, which reversed less than half of the falls in the previous two months. The best we can hope for now is that GDP was flat in the fourth quarter as a whole. Even this would require a stronger December, which looks unlikely given the weakness in the business surveys.
“The UK is not yet in recession in terms of overall GDP, but output per head did fall in in the third quarter of last year and almost certainly did so again in the fourth. The most likely scenario is still a shallow downturn, with inflation only rising a little further and unemployment remaining relatively low. This could best be described as ‘stagflation-lite’.
“Nonetheless, the economy will struggle to get anywhere near the growth numbers baked into the OBR’s forecasts for the Budget. The government needs to come up with a credible plan to solve the productivity puzzle, rather than simply double-down on the current policies of more tax, more public spending, and more state intervention.”
HSBC’s senior UK economist Liz Martins warned that the “mood music is not great” as the economy is stagnating.
Martins told BBC Radio 4’sToday programme, “We had zero growth in the third quarter of this year, a bad start to the fourth quarter, and this number hasn’t done enough to offset that bad start.
“So it does suggest that we’re going to have very low or zero growth for the final quarter as well.
“We’re not in recession but we’re not doing much growing either.”
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