- UK GDP rose 0.3% in November 2025 after a 0.1% fall in October, leaving three-month growth to November at just 0.1%.
- Services and production drove the monthly uptick, with a sharp rebound in motor vehicle manufacturing, while construction continued to contract.
- Forecasts remain subdued, with the IMF expecting about 1.2% growth in 2025 and 1.4% in 2026 and the OBR seeing medium-term growth around 1.5% as potential growth dips then recovers.
- Weak productivity, labour-supply constraints, and limited fiscal space keep risks skewed to the downside alongside inflation and trade uncertainty.
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Most recent data from the UK’s Office for National Statistics (ONS) confirms a modest rebound in November 2025, with monthly GDP up 0.3% following a 0.1% decline in October. The three-month rolling GDP growth to November was 0.1% compared with August, following a prior period of no growth. The services sector contributed positively (+0.3% monthly; +0.2% over three months), while production output rose monthly (notably in motor vehicle manufacturing) even though it fell slightly over the quarter; construction continued to decline significantly.
Growth forecasts remain conservative. The International Monetary Fund (IMF) projects UK GDP growth of around 1.2% in 2025 and 1.4% in 2026, citing easing monetary policy, positive wealth effects, and improved confidence—but highlighting trade tensions, elevated borrowing costs, and inflation as downside risks. [0search0] The OBR similarly foresees a slowdown in potential output growth from 1.8% in 2025 to 1.3% in 2026, rising to about 1.5% by 2030. Productivity assumptions are revised downward and labour supply constraints, partially due to lower net migration, are factored in.
Structural headwinds are evident. The manufacturing rebound in motor vehicles (following earlier disruptions) has driven monthly production gains, but over the most recent three-month period production fell slightly, dragged down by transport equipment and other subsectors. Construction remains weak. Productivity growth remains underwhelming historically, and fiscal space is constrained by rising debt and tax burden expectations. [0search0]
From a policy and investment standpoint, modest but better-than-expected monthly performance suggests potential for investor confidence, particularly if the November growth can be sustained into Q4 and beyond. However, core concerns—labor market slack, inflation pressures from energy/regulation, and external risks—require active mitigation. Business strategies should focus on sectors showing current momentum (e.g. advanced manufacturing, pharmaceuticals, trade-exposed industries) while policy reform should target boosting productivity (R&D, infrastructure, planning reform) and ensuring fiscal credibility to support favorable financing conditions.
Key open questions include: whether the November growth is temporary or signals a durable turn; the trajectory of inflation (especially regulated energy and utility bills); timing and magnitude of interest rate cuts; the capacity of the UK to raise productivity growth to pre-crisis norms; and whether external risks (trade, global slowdown) will derail by-year-end growth projections.
Supporting Notes
- Monthly GDP growth was 0.3% in November 2025, following a fall of 0.1% in October; the three-month GDP growth to November was 0.1% over the baseline period.
- Services output rose 0.3% month-on-month in November and 0.2% over three months to November; production rose monthly by 1.1%, though fell slightly over three months; construction output fell 1.3% in November and 1.1% over three months.
- The make-up of production gains in November was heavily influenced by a 25.5% surge in motor vehicles, trailers and semi-trailers output, following earlier sharp declines; this industry contributed significantly to monthly output growth but remained a drag in the three-month average.
- The IMF projects UK GDP growth of 1.2% in 2025 and 1.4% in 2026, noting downside risks from global trade tensions, borrowing costs, and weak productivity. [0search0]
- The OBR outlook anticipates potential output growth slowing from 1.8% in 2025 to 1.3% in 2026, before recovering to approximately 1.5% yearly by 2029-30; productivity trend growth is assumed to gradually increase but remains well below pre-financial-crisis averages.