The UK economy rebounded in November with GDP growth of 0.3%, after a contraction in September and October.
Activity was boosted by a 1.1% increase in the production sector and a 0.3% lift in the services sector, however monthly construction output is estimated to have fallen by 1.3% in November.
As a result, the more reliable three-month average shows more modest growth of 0.1%, after showing no growth in the three months to October.
Richard Pike, chief sales and marketing officer at Phoebus Software, commented: “Today’s figures provide some much-needed good news for the economy as it returned to growth in November, after showing no growth for the previous three months. A 0.1% increase in GDP won’t set the world alight but at least the UK economy is moving in the right direction.
“The bad news for the housing market is that construction output fell by 1.1% in November, with the lowest three-monthly reading since March 2023. With housebuilding activity taking a sharp downturn at the end of last year, we have to hope that client confidence returns in 2026 so construction companies can start building again.
“Looking ahead, the Office of Budget Responsibility downgraded its growth forecast for the UK in its most recent outlook but still predicts modest growth of 1.5% over the next three years. With rates coming down and affordability improving, we are optimistic the housing market could be a key driver for growth over the coming months.”
Derrick Dunne, CEO of YOU Asset Management, said: “While the volatile monthly figure showed 0.3% growth in November, GDP growth was harder gained over the three months to November 2025, ekeing out a paltry 0.1%. While growth is welcome, there is a concern here in which sectors showed signs of positivity and which took a hard downward turn. In particular, the construction sector contracted at -1.1% in what should be an problematic signal for the rest of the economy, despite the economy beating expectations on the monthly GDP figure.
“Construction is a leading indicator – it shows us where the rest of the economy downstream from its activity (think, people taking mortgages on those houses built, kitting out their homes etc) will go. Contraction of this nature in construction specifically is therefore a potentially negative signal. To be sure, it is likely that some of this downturn in activity was circumstantial as construction businesses held their breath ahead of the Budget. Lower interest rates will also boost activity. But to see one leading economic sector in particular sneeze like this could see the whole economy catch a cold.
“On the flipside to this, it is indicative that inflationary pressures should continue to ease in the month ahead and therefore rates."
Lindsay James, investment strategist at Quilter, added: “The UK economy returned to growth in November, with GDP rising by 0.3%, but that growth over a longer period remains meagre at best. That monthly figure did beat expectations of 0.1% as the services sector continued to be the main engine of the UK economy. Production picked up 1.1% in the month but over three months remains in contraction, with the downturn in construction deepening. However, on aggregate November showed glimmers of hope, notable too given the Budget overhang continued during this period. Whether this materialises into anything more sustained remains highly questionable, however.
“Unfortunately, it doesn’t seem like a bumper Christmas period followed either as we saw weak retail sales from the British Retail Consortium this week, mirroring disappointing Christmas sales from UK retailers such as Tesco, M&S and Primark. For what should be a jolly time of the year, the economic cheer was missing.
“While domestic uncertainty has now lifted for now, following the Budget, the global picture remains incredibly volatile and this was be continuing to buffet businesses looking for any kind of stability. The good news, however, is that inflation is coming back to target quicker than expected and thus interest rate cuts may be more aggressive than first though, subsequently boosting the economy. With manufacturing output having potential to improve as the situation at Jaguar Land Rover stabilises in the aftermath of its cyber-attack and the potential for consumer activity to start to rebound as we leave winter behind, then there is some positivity for those looking for it. After today’s figures, the government will certainly be hoping for a repeat of last year when the first half of the year saw strong economic growth, before tailing off into this latest malaise.”
