Data published by the Office for National Statistics (ONS) showed that the GDP grew by 0.1% in November, offsetting the October decline (-0.1%) and recording the first increase in the last three months. However, economists expected a 0.2% increase. Meanwhile, over the three-month period (through November), the GDP remained unchanged compared with the three months to August. Services showed no growth over this three-month period, while production fell by 0.7% and construction grew by 0.2%.
On an annual basis, GDP grew by 1.0% in November after an increase of 1.1% in October (revised from +1.3%). Consensus estimates suggested an increase of 1.3%. Overall, the latest data could give the Bank of England more room to cut interest rates this year - the derivatives market is currently pricing in monetary policy easing by 0.58% by the end of this year.
The ONS said that services output is estimated to have grown by 0.1% m/m in November, after falling by 0.1% in October. Of the 14 subsectors, output increased in 7, 2 showed no growth and 5 saw output decline in November. The largest positive contribution in the services sector in November came from the accommodation and food service activities subsector where output rose by 2.0% in the month, following a fall of 1.2% in October. Both food and beverage service activities, and accommodation grew in November, by 1.6% and 3.0%, respectively. Output in consumer-facing services increased by 0.5% in November, following a fall of 0.4% in October. Food and beverage service activities were the largest contributor to the increase at the industry level, with output growing by 1.6%.
Meanwhile, industrial production fell by 0.4% after falling by 0.6% in October. Economists had expected an increase of 0.1%. Manufacturing production declined by 0.3% after falling by 0.6% in October. Consensus estimates suggested unchanged value.