Despite the lingering uncertainty surrounding Chancellor Rachel Reeves’ upcoming budget, the UK economy demonstrated resilience in November, growing by a stronger-than-expected 0.3%. This positive data, released by the Office for National Statistics (ONS), provides a much-needed boost for the government as it navigates the country’s economic challenges.
The recovery of Jaguar Land Rover (JLR) from a cyber-attack that had previously impacted economic output earlier in 2025 appears to have contributed significantly to the November growth. The manufacturing sector, particularly motor vehicle production, saw a 25.5% improvement during the month.
The service sector also expanded by 0.3%, while production grew by 1.1%. However, the construction industry experienced a 1.3% decline, underscoring the ongoing concerns about the government’s ability to deliver on its promised building boom.
Yael Selfin, the chief economist at KPMG UK, noted that the data suggests the economy has “found its footing” in November, despite the uncertainty surrounding the budget. She expressed optimism that growth momentum will continue in the coming months, with “tentative signs of a pick-up in household spending.”
Economists at the National Institute of Economic and Social Research (NIESR) have projected a growth rate of 1.4% for the UK economy in 2025, a stronger performance compared to the previous year.
Ben Caswell, a senior economist at NIESR, commented that the chancellor’s efforts to bolster economic confidence by more than doubling the fiscal headroom at the budget appear to have eased speculation over future tax policy and the uncertainty that came with it.
The positive economic data has also led to a drop in the UK’s borrowing costs, which reached their lowest level in more than a year on Wednesday, fueling hopes of further interest rate cuts from the Bank of England.
However, the shadow chancellor, Mel Stride, criticised the government’s economic management, stating that the flat-lining growth is “more evidence of Labour’s economic mismanagement.” Stride argued that despite the government’s U-turns on some tax policies, their budget will still leave working people worse off and the economy weaker, with higher taxes stifling growth and fuelling inflation.
As the government prepares to release additional data on inflation and unemployment in the coming week, the focus remains on Reeves’ ability to navigate the economic challenges and provide support for sectors like hospitality, which have faced backlash over changes to the business rates regime.