By David Milliken and William Schomberg
LONDON (Reuters) – Britain’s economy grew slightly more strongly than expected in November but weakness in previous months leaves it at high risk of slipping into a recession, a potential blow for Prime Minister Rishi Sunak before an election expected in 2024.
Britain’s gross domestic product grew by 0.3% in November after a fall of 0.3% the month before, figures from the Office for National Statistics (ONS) showed on Friday, slightly beating economists forecasts of a 0.2% expansion in a Reuters poll.
But output shrank by 0.2% in the three months to the end of November, more than the 0.1% decline expected by the poll.
A contraction or potentially even flat output in December could lead to a second consecutive quarter of falling output, the ONS said, which would place the economy in a technical recession, albeit a mild one.
“The longer-term picture remains one of an economy that has shown little growth over the last year,” ONS chief economist Grant Fitzner said.
“GDP bounced back in the month of November, however, led by services with retail, car leasing and computer games companies all having a buoyant month.”
Britain’s economy struggled to gain momentum last year, as households were squeezed by rapid inflation and the highest Bank of England (BoE) interest rates in 15 years.
In November the government’s Office for Budget Responsibility (OBR) forecast growth of 0.6% for 2023 and 0.7% for 2024 – a weak backdrop for the national election which Sunak has suggested he will hold in the second half of this year.
Some economists see more scope for a pick-up in growth this year than the OBR or the even gloomier BoE do. Inflation dropped below 4% in November and mortgage rates have fallen as lenders expect the central bank to cut borrowing costs later this year.
Friday’s data showed economic output in November was 0.2% higher than a year earlier and has grown just 2.5% since 2019.
(Reporting by David Milliken; editing by William James)
