The National Gallery and St Martin-in-the-Fields at dusk. Trafalgar Square, London, UK
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Data released by the Office for National Statistics on Thursday showed that UK economic growth was weak in November, at only 0.1%.
By comparison, economists polled by Reuters expected a quarterly increase of 0.2%.
Real gross domestic product (GDP) fell 0.1% in October, after falling 0.1% in September and growing 0.2% in August.
The data comes as the Bank of England considers whether to cut interest rates at its next meeting on February 6.
Annual inflation data for December released on Wednesday was lower than expected, fueling widespread expectations of a 25 basis point interest rate cut at the central bank’s meeting.
While BoE policymakers will take into account inflationary pressures such as elastic wage growth and uncertainty about the UK economic outlook, such a change would see the key interest rate drop to 4.5% from 4.75%. The central bank’s inflation target is 2%.
The Labor government and the Treasury have been under pressure in recent weeks as government borrowing costs have risen, fiscal plans have been questioned and corporate tax burdens have increased. However, on Wednesday, the latest inflation data showed that consumer price growth in December had been slower than expected, falling to 2.5%, and core price growth slowed further, both of which received some relief.
The data was below expectations of economists polled by Reuters, who expected inflation to remain unchanged from November’s 2.6%.
Core inflation, which excludes volatile food and energy prices, was 3.2% in the 12 months to December, down from 3.5% in November.
Inflation in the UK hit a more than three-year low of 1.7% in September, but since then monthly prices have risen due to rising fuel costs and service prices. Annual service sector inflation was 4.4% in December, down from 5% in November.
The British economy has found itself in trouble of late, with economists expressing concern about the country’s weak growth prospects and concerns about headwinds caused by external factors, such as the potential for trade tariffs to be imposed after President-elect Trump takes office on January 20. Internal fiscal and economic challenges have dogged the Labor government and the Treasury since the October Budget.
Correction: The title of this article has been updated to reflect that the UK economy grew 0.1% in November. A previous version misstated this number.
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