Budget case becomes economic "cancer" - UK GDP growth of only 0.1% in November falls short of expectations.

The UK economy barely recovered in November last year, falling short of expectations, due to lingering worries about stagflation. The UK Office for National Statistics announced on Thursday that after contracting by 0.1% in both September and October, the UK's GDP grew by 0.1% month-on-month in November, lower than the market's expected 0.2%. These data have intensified concerns about the UK falling into a stagflation trap, despite a slight slowdown in inflation rates in December of last year. In the five months since the Labour Party took office, the UK economy has only seen growth in two months. Following the GDP data release, the pound fell by 0.2% against the US dollar. The UK Office for National Statistics stated that unless GDP grows by at least 0.07% in December, the UK economy will face a second consecutive quarter of stagnation. Last month, the Bank of England revised down its growth forecast for the fourth quarter to zero. Over the past week, UK Chancellor of the Exchequer Rachel Reeves has been under immense pressure as a global sell-off in bond markets pushed UK benchmark bond yields to a 17-year high, potentially derailing her economic agenda. In October last year, Reeves announced a 400 billion (US$489 billion) tax increase in her budget to repair public finances. Following the GDP data release on Thursday, Reeves attributed the lackluster economic growth to the previous Conservative government in a statement and expressed her determination to take further and faster measures to boost economic growth. Reeves hopes to increase investment in the UK and urges regulatory authorities to prioritize growth. In November last year, the largest sector of the UK economy, the services sector, only grew by 0.1%, while construction output rebounded by 0.4%. These sectors offset the decline in industrial output by 0.4%. In the three months leading up to November of last year, the UK's GDP did not grow. The UK economy is supported by the services sector. Luke Bartholomew, Deputy Chief Economist at asset management company abrdn, described the data as "another disappointing report." He said, "Economic activity has slowed significantly in recent months, though not to the point of recession, but not enough to dispel concerns about the economic outlook, especially as national insurance costs are set to rise." Rising borrowing costs have at times eroded Reeves' budget space, putting her at risk of breaking fiscal rules. Wednesday's inflation data, slightly below expectations, partly reversed this situation, but weak economic growth data continues to put pressure on Reeves. In the first half of last year, the UK was one of the best-performing economies among the G7, but economic growth has sharply slowed since Labour Prime Minister Keir Starmer took office.