- GDP grew by 0.3% in November
- Black Friday helped boost the service sector
- Over three months to November the economy shrank by 0.2%
Danni Hewson, head of financial analysis at AJ Bell, comments on the latest UK GDP figures:
“When we are talking about such small moves on either side of the line most households won’t really care if the economy is growing or not, but psychologically avoiding a technical recession matters.
“November’s surprisingly robust GDP figures could suggest that falling inflation is finally having an impact on people’s sense of wellbeing, but in reality it seems many were simply tempted by Black Friday sales which in turn boosted retailers, couriers and warehouse operators.
“The bigger question is whether the momentum continued through the final days of 2023 and we won’t find out the answer to that for another month, but the odds look pretty evenly stacked.
“Whilst people were happy to spend when a bargain was to be had, ongoing concerns about the cost of living is tempering our consumption and it’s notable that whilst people were buying stuff they were having to cut back elsewhere.
“Spend on travel and nights out fell in November as people prioritised gift buying or chose to save up their pennies to indulge in Christmas get togethers.
“The figures also saw a boost from the end of strikes in Hollywood, which enabled film and TV productions to resume, and fewer days of industrial disruption closer to home.
“You could blame the weather for the continued decline in construction and certainly recent earnings updates have hinted that falling mortgage costs could inject renewed vigour into the housing sector.
“But it will take time for projects to get off the drawing board and even a hint that anticipated rate cuts are being shoved into the long grass could undermine confidence.
“In truth the economy feels pretty stuck in the mud and though it did manage to inch forward in November it could just as easily get pulled in the opposite direction in the months to come.
“With many company bosses already raising concerns about the price of shipping and the big jump in wage costs heading our way in April, it’s much too early to ditch dry January and whip out the fizz.”
