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The economy grew by 0.3 per cent in November, new figures from the Office for National Statistics (ONS) show.
The ONS said the services sector was the main contributor to the monthly growth in Gross Domestic Product (GDP).
Services output grew by 0.4 per cent in November 2023, following a fall of 0.1 per cent in October 2023.
The economy grew by more than expected in November, with economists having forecasted GDP to rise by 0.2 per cent.
Black Friday sales helped to boost the economy, having a positive impact businesses across a variety of sectors.
Alongside the uplift provided by the services sector, production output also grew by 0.3 per cent in November 2023, following a fall of 1.3 per cent in October.
The construction sector fell by 0.2 per cent in November after a fall of 0.4 per cent in the previous month.
The ONS’s chief economist Grant Fitzner said: “The economy contracted a little over the three months to November, with widespread falls across manufacturing industries, which were partially offset by increases in public services, which saw less impact from strike action.
“GDP bounced back in the month of November, however, led by services with retail, car leasing and computer games companies all having a buoyant month.
“The longer-term picture remains one of an economy that has shown little growth over the last year.”
Chancellor of the Exchequer Jeremy Hunt, who has welcomed the news, said tax cuts for businesses and workers put the UK in a strong position for future growth.
Mr Hunt said: “While growth in November is welcome news, it will be slower as we bring inflation back to its 2 per cent target.
“But we have seen that advanced economies with lower taxes have grown more rapidly, so our tax cuts for businesses and workers put the UK in a strong position for growth into the future.”
Is the UK likely fall into recession?
In October, when manufacturing and construction sectors were hit by poor weather conditions, GDP fell by 0.3 per cent. The economy also shrank between July and September, revised estimates from the ONS show.
Despite the growth in November, the UK is still teetering on the brink of falling into a technical recession at the end of the year.
The country enters a technical recession when the economy shrinks for two consecutive quarters.
Monthly GDP would need to be fractionally below zero in December, 0.02 per cent or more, in order for the economy to have shrunk between October and December as well.
Mr Fitzner told BBC’s Radio 4 Today programme “everyone is obsessed” with whether the Q4 figure is slightly positive or slightly negative.
He said: “It’s important to remember that a recession is not just a a very small negative number followed by another very small negative number. It’s a significant and sustained fall in output. We don’t expect to see that.”
Mr Fitzner added that if the December figure is flat and no revisions are made to previous months, the country might avoid a negative Q4.
James Smith, research director at the Resolution Foundation, said the growth indicated the UK had a good chance of avoiding entering a recession.
Mr Smith said on X: “ONS GDP data out for November this morning shows the economy growing more quickly than expected at 0.3% on the month, driven by ICT and retail. This suggests that there’s now a good chance we avoid technical recession in the second half of 2023.”
Analysts are highlighting that despite growth in November, the economy remains week.
Ruth Gregory, deputy chief UK economist at Capital Economics, said revised forecasts of Q4 GDP still suggest the economy has “done no better than to stagnate in the second half of 2024”.
Jeremy Batstone-Carr, European strategist at Raymond James Investment Services, said: “Despite a slight uptick, today’s data should not detract from the reality that the economy remains weak, with a period of stagnation that has now stretched over more than a year.”
Alice Haine, personal finance analyst at Bestinvest, the DIY investment platform and coaching service, warned households to focus on paying down excessive debts and building up emergency savings, while remaining cautious about spending.
Additional reporting by PA News Agency
