World Cup revelry helps UK narrowly avoid recession
Gross domestic product (GDP) measures the value of goods and services produced in the UK. It estimates the size of, and growth in the economy.
Latest estimates from the Office for National Statistics (ONS) revealed GDP grew 0.1% in November 2022, following growth of 0.5% in October.
While the market has been buoyed by the positive uplift which means the UK has narrowly avoided recession, when looking at the quarter statistics, figures for the three months to November revealed GDP actually fell 0.3%.
The ONS noted that the services sector was the biggest contributor to the figure (up 0.2%), with growth in food and beverage service activities ramped up due to the FIFA World Cup fever.
On the flip side, manufacturing pulled the growth figure down (0.5%), though it was partially offset by a positive contribution from mining and quarrying, the ONS revealed.
Elsewhere, construction was flat in the month following growth in October.
‘UK economy has a bit more fight in it’
For experts, the November uplift is a pleasant surprise, as it seemed the UK would be unable to shake its course into a recession.
Danni Hewson, AJ Bell financial analyst, said: “November didn’t play ball, in fact it was busy with another game altogether as football fans propped up bars across the country as the World Cup wove its magic. There was also growth in other parts of the service sector, with computer programming and telecommunications being singled out in the latest data.”
However, Hewson added: “It’s hard to be a ‘Negative Nelly’ in the face of today’s relieved headlines, but let’s not get carried away. The UK economy might have a bit more fight in it than many analysts had anticipated but celebrating 0.1% growth feels a bit like clutching at straws.
“Over the three months to November GDP fell and the UK economy is still floundering around in the post-pandemic mire, down 0.3% on February 2019 levels.
“Manufacturing seems stuck in its downward groove, construction flatlined in November and strike action was beginning to exert its grip on productivity on the rail network and postal and courier services. December will tell the tale and it’s hard to see how this story will have a happy ending.
“There is now a small seed of doubt that next month’s figures will confirm that the economy has met the criteria for recession. We feel it in every bill we pay, every purchase we make and every journey we take. Things are tough and we’ve been warned they are going to get tougher even if we don’t put a label on it.”