Britain’s economy grew 0.3% in November 2025, official figures showed on 15 January 2026, outperforming economists’ expectations of just 0.1% growth. The data marked a rebound after a 0.1% decline in October, and analysts noted it as the fastest monthly expansion since June.

🚗 Industrial Output Rebounds After Disruption

Industrial production expanded strongly in November, rising 1.1%, according to the Office for National Statistics (ONS). Meanwhile, a key driver of this growth came from the automotive sector. Car manufacturing, particularly at Jaguar Land Rover (JLR), surged by 25.5% as the company returned to full production following a cyberattack earlier in the year.

Consequently, nearly half of the monthly GDP increase stemmed from industrial gains. In contrast, other sectors showed mixed results.

📊 Services Sector Adds to Growth

In addition to manufacturing strength, the services sector also contributed positively, expanding 0.3% after a prior dip. This uptick reflected increased activity in parts of the economy that had softened in previous months.

Despite the overall progress, certain areas lagged. For instance, construction output declined sharply, continuing a downward trend. Nonetheless, the broader economy showed resilience against earlier downturns.

💼 Business Sentiment and Budget Uncertainty

Economists noted that uncertainty about the government’s budget statement in late November had weighed on business confidence earlier. Despite this, output held up better than expected. Firms reported that concerns over future tax measures did not slow production as much as feared.

At the same time, quarterly data pointed to a modest expansion. Over the three months ending in November, GDP grew 0.1%, which beat earlier forecasts of a contraction.

💷 Market Reactions and Outlook

Financial markets reacted positively to the stronger figures. Sterling briefly gained value against the US dollar, while short-dated British government bond yields edged higher. Investors also updated expectations for future Bank of England interest rate cuts, pricing in potential rate adjustments later in the year.

Meanwhile, analysts cautioned that growth remained modest overall, and uncertainties related to budget policy and business sentiment could influence output in the coming months.

🌍 IMF and Growth Prospects

The International Monetary Fund (IMF) expects the UK’s GDP to grow around 1.3% in 2026, which would place it among the faster-growing economies in the Group of Seven. However, this pace still falls short of longer-term historical averages.