The National Gallery and the church St. Martin’s in the Fields at dusk. Trafalgar Square, London, UK
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The U.K. economy grew at a lackluster pace of 0.1% in November, data from the Office of National Statistics showed Thursday.
This compares with the 0.2% month-on-month growth expected by economists polled by Reuters.
Monthly real gross domestic product (GDP) fell by 0.1% in October, following a decline of 0.1% in September and growth of 0.2% in August.
The data comes as the Bank of England considers whether to lower interest rates at its next meeting on Feb.6.
A cooler-than-expected annual inflation print for December, out Wednesday, fueled broad expectations of a 25-basis-point rate cut when the central bank meets.
Such a trim would bring the key interest rate from 4.75% to 4.5% although BOE policymakers will be factoring in inflationary pressures, such as resilient wage growth and uncertainty over Britain’s economic outlook. The central bank’s inflation target is 2%.
The Labour government and Treasury have been under pressure in recent weeks amid rising government borrowing costs and questions over their fiscal plans and a higher tax burden on businesses. Both were given something of a reprieve on Wednesday, however, when the latest inflation data showed consumer price growth had cooled more than expected to 2.5% in December, with core price growth slowing further.
The print came in below the expectations of economists polled by Reuters, who had anticipated the inflation rate would remain unchanged from the 2.6% reading of November.
Core inflation, which excludes more volatile food and energy prices, came in at 3.2% in the twelve months to December, down from 3.5% in November.
The U.K.’s inflation rate had hit a more than three-year low of 1.7% in September, but monthly prices had accelerated since then on the back of higher fuel costs and the price of services. In December, the annual services inflation rate stood at 4.4%, down from 5% in November.
The U.K. economy has found itself in a tight spot of late, with economists voicing concerns over the country’s sluggish growth prospects and worries over headwinds caused by both external factors, such as potential trade tariffs once President-elect Donald Trump takes office on Jan. 20, along with internal fiscal and economic challenges that have dogged the Labour government and Treasury since the October budget.
Correction: This article’s headline has been updated to reflect the U.K. economy grew by 0.1% in November. A previous version had misstated the figure.
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