Official figures indicate that the UK economy has expanded by a better-than-anticipated 0.3 per cent in November despite doubts concerning the budget of Rachel Reeves.

The gain was reported by figures by the Office for National Statistics (ONS) on 15th January, which was an improvement over a 0.1% decline in October.

Analysts had anticipated a smaller growth of 0.1%. The improved-than-anticipated figures will present positive news to the chancellor since he hopes that an economic revival will boost the fortunes of the Labour Party.

The cyber-attack on the carmaker Jaguar Land Rover at the beginning of 2025 earlier impacted economic output through its depressed vehicle production. The recovery of the company seems to have led to the growth of November, as the company experienced a 25.5 per cent improvement in the manufacture of motor vehicles during the month.

“The services sector increased in November by 0.3, and the production increased by 1.1,” the ONS said. Nonetheless, it was a 1.3 per cent decline in construction, which highlights concerns that the building boom that the government hoped to see is not being realised.

The chief economist of KPMG UK, Yael Selfin, indicated that the data indicated that the economy had established itself in November.

“Economic activity slowed the pace of business in November despite the uncertainty surrounding the future of the budget. Now that the worst of the uncertainty is behind the businesses, we project that growth momentum will be felt in the next several months,” she said, with added tentative signs of a pick-up in household spending.

A study at the National Institute of Economic and Social Research (NIESR) reported that the statistics indicated growth of 1.4% in the year 2025 as a whole, which was better than the year before.

Ben Caswell, senior economist at NIESR, said: “It is on this backdrop that the chancellor increased her fiscal headroom at the budget more than twofold in a bid to boost economic confidence. Although the full impact of this is yet to be felt, the move seems to have calmed the speculation about what the future of tax policy would be and the uncertainty that was associated with it.”

On Wednesday, the UK borrowing rates went down to their lowest in over a year in anticipation of further reduction of the interest rates by the Bank of England.

The ONS claimed that during the three months to November, a time it claimed was more reflective of the health of the economy, the gross domestic product rose by 0.1, suppressed by the JLR closure.

This is the message of the shadow chancellor, Mel Stride: “this morning, the news of growth being flat-lining is another example of economic mismanagement by the Labour Party. 

Labour is day by day disintegrating their budget due to the wrong decisions they made.”

“Although the Labour Party has turned itself around on the family farms tax and the business rates tax, its budget will still result in the working people being worse off and in a weaker economy, as the increase in tax will suffocate growth and create inflation.”

The next week will give further indication of the economic condition, as the data on inflation and unemployment will be released. Reeves is eager to witness further reduction in the rates as the government is keen to reduce the cost of living.

Suren Thiru, the economics director of the Institute of Chartered Accountants in England and Wales, explained: “This growth recovery is unlikely to lead to a lasting rebound of the economy with less consumer expenditure in the face of increasing tax burden and higher unemployment, most likely to result in a significantly weaker growth in 2026, despite a reduction in inflation.”

This means that the February interest rate cut is less probable due to these figures, as they will provide those rate-setters who are still worried about inflation with enough assurance that economic conditions are well under control to postpone a vote to slacken policy again.

Speculation followed the chancellor on 25 November, giving her a second tax-raising budget. Business groups attributed the scamming of businesses to the on-and-off rumours about taxes.

In an allusion which suggests that the speculative boom in the run-up to a Reeves budget was probably profitable business to certain quarters, the ONS reported that the biggest contribution to growth in the service sector was made by “professional, scientific and technical activity,” and it was especially in accounting, bookkeeping, auditing and tax consultancy that the growth was substantial.

Reeves will declare further assistance to the hospitality sector in the foreseeable future after facing a backlash regarding the alterations to the business rates regime.