Finance
UK economy bounces back in November, boosted by JLR recovery
Published by Global Banking & Finance Review®
Posted on January 15, 2026
4 min readLast updated: January 19, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on January 15, 2026
4 min readLast updated: January 19, 2026
The UK economy grew by 0.3% in November, driven by Jaguar Land Rover's production recovery. Industrial and services sectors both saw increases.
By William Schomberg and David Milliken
LONDON, Jan 15 (Reuters) - Britain's economy grew more strongly than expected in November, boosted by the return to full production at Jaguar Land Rover after a cyberattack which hit the carmaker and its suppliers.
Gross domestic product expanded by 0.3% on the month - the fastest growth since June - after a drop of 0.1% in October, official data showed on Thursday.
Economists said the figures also suggested that nervousness about finance minister Rachel Reeves' annual budget statement on November 26 had not affected output as much as feared.
Before the data, economists polled by Reuters had forecast that GDP would expand by 0.1% on a month-on-month basis, in large part because of the boost from the recovery of production at JLR.
Sterling briefly jumped in value against the U.S. dollar after the data. Investors continued to almost fully price in two quarter point interest rate cuts by the BoE this year.
AUTO OUTPUT UP, SERVICES TOO
Just under half of November's growth was accounted for by a 1.1% rise in industrial output, which in turn was driven by a 25% rise in car production - the biggest monthly increase in car production since July 2020 when COVID restrictions eased.
But output in Britain's dominant services sector also grew by more than expected in November, rising by 0.3% from October when it fell by 0.3%.
Previous surveys of Britain's economy had shown some signs of stumbling ahead of the budget as speculation about possible tax increases weighed on the economy.
The Office for National Statistics said firms across the economy reported they and their customers had been awaiting the outcome of the budget in November as they had been in October, including in the construction sector where production fell sharply for a second month in a row.
Stuart Morrison, research manager at the British Chambers of Commerce, said companies were not showing a lot of relief after they were spared a repeat of the big tax increases included in Reeves' first budget in 2024.
"Firms are telling us they're still cautious about investing and recruiting, meaning growth will stay limited for the foreseeable," Morrison said.
The Bank of England expects Britain's economy to have flat-lined in the October-to-December period of 2025 although it thinks underlying growth is running at about 0.2% a quarter.
In the three months to November, the economy grew by just 0.1%, the ONS said, though that was markedly faster than the 0.2% decline forecast in the Reuters poll, partly due to an upward revision to September data.
Sanjay Raja, chief UK economist at Deutsche Bank, said the economy could outpace forecasts in early 2026 due to the stronger-than-expected data and the end of budget-related uncertainty.
Reeves and Prime Minister Keir Starmer have promised to speed up Britain's economy but there has been no step change so far, 18 months after their Labour Party won a national election.
A survey published on Wednesday showed businesses turned the most pessimistic in three years at the end of 2025 and their mood worsened after Reeves' budget.
In the housing market there were more optimistic signals, according to a report released by the Royal Institution of Chartered Surveyors earlier on Thursday which showed sales expectations reached their highest since the end of 2024 in December.
Yael Selfin, chief economist at KPMG UK, said lower inflation could help boost household spending this year.
"Despite the relatively muted consumer sentiment so far and consumer-facing services output declining in November, there are some tentative signs of a pick-up in household spending," Selfin said.
The International Monetary Fund has forecast that Britain's economy will grow by 1.3% in 2026, the same as last year.
Although that would be the third-fastest among the Group of Seven nations after the United States and Canada, it would be less than half its typical pace in the roughly 15 years before the global financial crisis of 2007-09.
(Writing by William Schomberg; Editing by David Milliken and Toby Chopra)
Economic growth refers to the increase in the production of goods and services in an economy over a period of time, often measured by the rise in GDP.
The Bank of England is the central bank of the United Kingdom, responsible for formulating monetary policy, issuing currency, and maintaining financial stability.
Explore more articles in the Finance category
