Economic growth remains fragile

The risk of recession remains despite stronger retail sales helping the UK’s economy to bounce back in November.

The economy grew by 0.3% in November, according to the latest figures from the Office for National Statistics (ONS), after it shrank during the previous months.

Black Friday sales boosted retailers in the last quarter of 2023, but the ONS said the economy had shown “little growth” over the past year.

Alex Veitch, Director of Policy and Insight at the British Chambers of Commerce, said: “Today’s ONS data, showing GDP grew 0.3% in November, but fell 0.2% in the three months to then, indicates how fragile UK economic growth is right now.

“It’s likely the economy will be stuck in the slow lane for the foreseeable future. Our latest Quarterly Economic Forecast expects growth below 1.0% for the next two years.

“The Chancellor’s decision to make full expensing permanent was welcome, but more needs to be done to help businesses invest and drive economic growth. Despite the headline rate of inflation easing, firms are continuing to battle with high interest rates, recruitment difficulties, and tough international trading conditions.

“Businesses are crying out for a long-term economic plan that prioritises growth. In the upcoming budget, and the election campaign to come, that must be the priority for all politicians.”

The BCC’s latest Quarterly Economic Forecast expects UK GDP growth to flatline for the next three years. In the short term, the BCC is expecting 0.6% growth for the whole of 2023, falling to 0.4% in 2024 and rising slightly to 0.6% in 2025. Prolonged high interest rates, trade barriers, particularly with the EU, and limits on consumer spending are all seen to feed into a low growth climate.