November is proving to have been a lucky month in Britain. Inflation slowed significantly: from 4.6 per cent on the year in October down to 3.9 per cent on the year in November (a bigger fall than anyone predicted). Not only that: this morning we learned from the Office for National Statistics that the economy grew by 0.3 per cent, rebounding from an (unrevised) 0.3 per cent contraction in October.
Unfortunately that headline growth rate was largely thanks to a handful of temporary factors. Growth in overall services, up 0.4 per cent, is mainly attributed to a reduction in strikes that month, particularly within the health and transport sectors. Furthermore, feedback from businesses to the ONS suggest Black Friday sales ‘had a positive impact on monthly turnover’.
None of this is the stuff of long-term, sustainable growth. But the bounce-back from the previous month may just be enough to keep the UK out of a recession for now.
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