To receive breaking news updates in your email inbox in real time, sign up for our free breaking news emails.
Register for our complimentary email notifications for the latest breaking news.
The economy of Britain experienced a higher growth rate in November than anticipated, raising optimism that the country can steer clear of a recession in 2024.
In November, the Office for National Statistics (ONS) reported that the Gross Domestic Product (GDP) increased by 0.3%, following a decrease of 0.3% in October.
Economists had predicted a 0.2% increase in GDP, as the possibility of the country facing a recession by the end of the year remains uncertain.
The Chancellor, Jeremy Hunt, praised the positive development and affirmed that the nation is well-positioned for future growth.
However, members of opposing political parties and labor union leaders criticized the “disappointing” growth numbers and argued that Rishi Sunak’s statement about the economy making a turnaround did not hold up in light of actual economic conditions.
The increase in economic growth was primarily fueled by the expansive services industry, which saw a 0.4 percent rise in the month. This sector played the largest role in contributing to the overall growth. This comes after a decline in the economy in October, when the manufacturing and construction sectors were negatively impacted by inclement weather.
This means that the UK is at risk of entering a technical recession by the end of the year, which is when there are two consecutive quarters of economic decline.
The increase in November was described as “welcome” by Chancellor Jeremy Hunt.
Based on the updated data from the Office for National Statistics, the economy experienced a decrease in the months of July to September. This means that in order for there to be a decline in the economy between October and December, the monthly GDP would need to be slightly lower than zero, specifically by at least 0.02 percent in December.
The CEO of ONS, Grant Fitzner, stated that decreases in manufacturing sectors were partly balanced out by rises in public services, which were less affected by strikes.
He stated, “The GDP experienced a recovery in November, driven by the service sector, particularly in retail, car leasing, and computer games. However, the overall trend shows little growth for the economy in the past year.”
Mr Hunt stated that while the growth observed in November is a positive development, it is expected to be slower as efforts are made to bring inflation back to its target of 2 per cent.
However, it has been observed that developed countries with lower tax rates have experienced higher rates of economic growth. Therefore, our reductions in taxes for both businesses and employees have positioned the UK advantageously for future growth.
Rachel Reeves, the Labour Party’s shadow chancellor, stated that the slow economic growth is evidence of Mr. Sunak’s “record of failure.” She also pointed out that he was unable to defeat Liz Truss, reduce waiting lists, and prevent immigration by boat, and now he has also failed to stimulate economic growth.
Rachel Reeves, from the Labour Party, stated that the government did not fulfill their promise to expand the economy.
According to Sarah Olney MP, the Treasury representative for the Liberal Democrats, Mr Sunak’s statement about a turning point in the economy has not held up in light of actual economic conditions. She further stated that there is no growth and the prime minister lacks a plan or understanding of how to revitalize the economy.
The general secretary of the TUC, Paul Nowak, stated that the year started with “more disappointing growth statistics,” expressing concern over the Conservative government’s inability to properly fund essential public services.
The current administration led by Sunak is concerned about the potential decline of the British economy due to persistent assaults on shipping in the Red Sea.
On Thursday evening, the United States and the United Kingdom conducted numerous airstrikes on targets associated with the Iran-backed Houthi rebels in Yemen. These rebels have been attacking numerous international cargo ships in the Red Sea, an important route for global trade, since the beginning of Israel’s conflict with Hamas in Gaza.
According to the BBC, the Treasury has created simulations of potential situations, including a $10 increase in crude oil prices and a 25% increase in natural gas. This is due to concerns that another energy crisis could occur if the disruption to cargo traffic extends to tanker traffic.
On Friday, the cost of Brent crude, the global standard for oil prices, increased by two percent to $78.94 per barrel. The price of US West Texas crude also rose by 2.1 percent to $73.55.
Source: independent.co.uk
