In This Article:
Europe’s second largest bank has slashed its forecasts for growth in the British economy following turmoil in financial markets and weak official data.
Paris-based BNP Paribas said it expects UK GDP to expand by 1.1pc this year, down from its previous estimate of 1.4pc.
It comes after official figures showed the economy grew 0.1pc in November, which was lower than analyst forecasts of 0.2pc.
The bank said it expected UK GDP to hit 0.8pc for 2024, down from its last projection of 0.9pc, as growth appeared close to 0pc in the final three months of the year, below its previous expectation of 0.3pc.
Europe economist Dani Stoilova said the bank felt “more caution, less optimism” after a surge in bond yields at the start of the year amid concerns that Chancellor Rachel Reeves will not be able to meet her fiscal rules.
She said: “We entered the year with a cautiously optimistic view on the UK outlook.
“Since then, elevated gilt yields, currency weakness, and downside surprises to activity data have jolted UK markets and sentiment.
“These moves have, at least in part, been underpinned by growing concerns that the UK is entering a period of stagnation and further amplified by concerns about debt sustainability.”
The downgrade means the UK economy is still on track to grow slightly more than France and Germany this year, where BNP Paribas forecast GDP will rise by 0.4pc and 0.8pc respectively.
But lower expectations will be a major headache for Ms Reeves as it looks increasingly likely that the Office for Budget Responsibility (OBR) will cut its own forecasts for UK economic growth at its spring statement in March, a move that will further erode the margin by which the Chancellor can meet her borrowing targets.
Back in October, the OBR forecast that the UK economy would grow by 2pc in 2025, roughly double the rate that BNP Paribas now expects.
Leading indicators such as purchasing managers index (PMI) data and jobs surveys have signalled that companies are cutting back on hiring more quickly than expected in the wake of Ms Reeves’s record tax-raising Budget.
The Chancellor summoned the bosses from Britain’s consumer protection watchdogs to Downing Street on Thursday to demand ideas for growth.
Bosses from the main railway, water, energy and aviation regulators were told to draw up plans to help her fix the economy.
Ms Reeves, who has overseen a slump in business confidence since taking charge, said she wanted to see “greater ambition and urgency” from the six regulators.
She told the watchdogs, which included Ofcom, Ofwat and Ofgem, they needed “fresh ideas” to help the Government grow the economy.
Proposals tabled at the meeting included making more use of drones in the public sector. Quicker responses on planning and licence applications, energy tariff reforms and opening up access to the data on rail operators were also put forward.
Read the latest updates below.
06:10 PM GMT
Signing off...
That’s all from us today on the Business blog. You can click here for all our latest reporting. Have a lovely evening.
06:03 PM GMT
FTSE 100 hits near eight-month high
The FTSE 100 jumped by 1.09pc to hit a near eight-month high on Thursday, following strong earnings results and signs of slowing inflation.
The blue chip index rose to 8391.9, its strongest close since May. The FTSE 250 index also rose by 1pc.
A series of upbeat earnings reports brought substantial share price jumps for the likes of Burberry, Deliveroo and Trustpilot.
The unexpected drop in inflation in December, announced yesterday, also pushed traders to increase their bets on Bank of England interest rate cuts.
Investors have fully priced in two reductions this year, but are increasingly leaning towards a third, which would take the Bank Rate to 4pc by the end of 2025.
Government borrowing costs continued to cool, with yields on 10-year government bonds fell by 0.051 percentage points to 4.679pc while rates on 30-year bonds fell by 0.057 percentage points to 5.243pc.
03:29 PM GMT
Europe’s biggest bank slashes forecast for UK growth
One of Europe’s largest banks has slashed its forecasts for growth in the British economy following turmoil in financial markets and weak official data.
Paris-based BNP Paribas said it expects UK GDP to expand by 1.1pc this year, down from its previous estimate of 1.4pc.
It comes after official figures showed the economy grew 0.1pc in November, which was lower than analyst forecasts of 0.2pc.
The bank said it expected UK GDP to hit 0.8pc for 2024, down from its last projection of 0.9pc, as growth appeared close to 0pc in the final three months of the year, below its previous expectation of 0.3pc.
Europe economist Dani Stoilova said the bank felt “more caution, less optimism” after a surge in bond yields at the start of the year amid concerns that Rachel Reeves will not be able to meet her fiscal rules.
She said: “We entered the year with a cautiously optimistic view on the UK outlook.
“Since then, elevated gilt yields, currency weakness, and downside surprises to activity data have jolted UK markets and sentiment.
“These moves have, at least in part, been underpinned by growing concerns that the UK is entering a period of stagnation and further amplified by concerns about debt sustainability.”
With that, I’ll thank you for following the live updates so far and leave you in the capable hands of Melissa Lawford.
03:01 PM GMT
Gold hits record high amid ‘sluggish’ UK growth
The price of gold has climbed to a record high as investors have sought a safe haven from the “sluggish growth prospects” of the British economy.
Over the past 12 months, gold has appreciated by £647.63, rising from a January 2024 low of £1,580.63 to today’s £2,228.26 per troy ounce - a record in sterling terms.
The yellow metal, which is priced internationally in dollars, has climbed in value after a weakening of the pound against the US currency since the turn of the year.
Solomon Global, a supplier of LBMA-approved gold, said investors had also become wary of “internal fiscal pressures following the autumn budget”.
Managing director Paul Williams said: “Gold’s record-breaking performance in GBP reflects local and global economic conditions.
“Gold shone on the global stage throughout 2024, and the factors that led to its stellar performance don’t look to be abating in 2025.
“As the UK navigates economic challenges, many are turning to the asset as a stable and reliable investment. This trend underscores gold’s enduring appeal as a hedge against uncertainty and a means to safeguard wealth.”
02:40 PM GMT
FTSE 100 rises amid rate cut hopes
The FTSE 100 rose amid increasing hopes that there will be interest rate cuts in the UK and the US.
The UK’s blue-chip gained 1pc after weaker than expected growth figures, while US stocks opened slightly higher as investors assessed American retail sales data.
US retail sales rose 0.4pc in December from the previous month, the Commerce Department said, which was lower than 0.6pc expected by analysts and down from November’s upwardly revised 0.8pc gain.
The Dow Jones Industrial Average rose 68.7 points, or 0.2pc, at the open to 43,290.25.
The S&P 500 rose 13.7 points, or 0.2pc, to 5,963.61​, while the Nasdaq Composite rose 62.6 points, or 0.32pc, to 19,573.867
02:19 PM GMT
Reeves’s plans need to start bearing fruit, says think tank
The Chancellor’s growth plans need to “start bearing fruit”, a left-leaning think tank has warned, after the economy expanded at a slower pace than analysts had expected in November.
Britain’s record has been “disappointing” since it became the fastest-growing economy in the G7 in the first six months of last year, according to the Resolution Foundation.
It said the nation will need to beat forecasts for the current pace of growth if the Government is to meet its ambition to raise living standards.
Senior economist Simon Pittaway said: “In recent years the UK has been a growth rollercoaster, with a recession in late 2023 followed by a bounce back in early 2024. But its longer-term record is one of economic stagnation, and that is where Britain risks returning to.
“The paltry GDP growth late last year reinforces the need for the government’s economic plans to start bearing fruit.”
01:56 PM GMT
Labour’s ‘economic policy is failing’
Telegraph readers have warned that “the worst is still to come” after official figures showed Britain’s economy grew by less than expected in November.
Here is a selection of views from the comments section below and you can join the debate here:
01:29 PM GMT
Economy forecast to grow at less than half the speed of early 2024
Britain’s economy will grow in the first quarter of this year but at less than half the pace during the same period in 2024, according to new forecasts.
GDP will expand by 0.3pc in the first three months of the year after a quarter of stagnation at the end of 2024, according to the National Institute of Economic and Social Research (NIESR).
The Office for National Statistics said the economy grew by 0.7pc in the first three months of 2024.
In the first six months of last year, Britain had the fastest rate of growth in the G7. Officials described the UK economy as “going gangbusters”.
NIESR associate economist Hailey Low said: “The subdued growth figures today elevate concerns over the UK’s economic outlook moving into 2025.
“The continued slowdown into Q4 may indicate falling confidence in the short term.
“However, it is crucial to wait until the additional government spending announced in the budget comes into effect in April before drawing conclusions about economic growth in the medium term.”
12:57 PM GMT
Wall Street poised to edge higher amid rate cut hopes
Wall Street may well mirror London’s stock markets later, which have risen as weak growth has raised hopes for interest rate cuts.
The S&P 500 and Nasdaq inched higher in premarket trading ahead of economic data that could offer insights into the health of the world’s largest economy.
On Wednesday, Wall Street’s main indexes logged their biggest one-day jump since November after data indicated that underlying inflation was subsiding and three of the country’s biggest banks reported bumper results.
Traders now see the Federal Reserve cutting interest rates by September. They had all but priced out any reductions for 2025 earlier in the week.
Today, retail sales figures for December and a weekly report on jobless claims could influence the markets.
Ahead of the opening bell, Bank of America rose 2.3pc ahead of the opening bell after the country’s second-largest bank’s investment bankers raised profits by capitalising on resurgence in dealmaking in the fourth quarter and interest income rose.
Morgan Stanley rose 1.1pc as it said profit increased in the fourth quarter, fuelled by a wave of dealmaking and stock sales by the investment bank.
12:24 PM GMT
London-listed companies warn on impact of Budget
Some London-listed companies suffered falls in their share price as they issued warnings about the impact of the Chancellor’s Budget on their finances next year.
Premier Inn owner Whitbread dropped as much as 2.8pc as it reported a dip in revenue-per-room in its third quarter results.
In its forecast for the next financial year it said the gross UK cost inflation would rise between 5pc and 6pc on its £1.7bn cost base “including the impact of the UK Budget”.
It added that cost cutting of £50m would mean this had a net impact of between 2pc and 3pc.
Dunelm’s shares were down 5pc as it forecast annual profits would be within market expectations as it remained “mindful of the impact of the Autumn Budget”.
It said: “As a large employer, with over 11,500 colleagues, we have previously highlighted the impact of ongoing wage inflation.
“Whilst the National Living Wage increase was largely anticipated, the increase in employer National Insurance Contributions is an additional cost headwind.
“Initiatives to drive productivity across the business are underway, and as these initiatives mature, we anticipate mitigating the upward pressure on costs over the medium term.”
11:46 AM GMT
Taylor Wimpey slumps as it warns of Budget impact
Taylor Wimpey was the worst performer on the FTSE 100 after it warned about the risks of inflation and the impacts of the Budget over the coming year.
The housebuilder’s shares slumped by as much as 4.7pc as it said it was “too early to gauge customer behaviour for 2025” despite ending last year with stronger sales.
It told shareholders: “Whilst price negotiations for 2025 are ongoing, we anticipate increased build cost pressure as a result of the changed economic backdrop, including as suppliers seek to factor in the impacts of the recent UK Budget.”
During her October Budget, the Chancellor announced a £25bn hike in national insurance for employers as well as a rise in the minimum wage, both of which are expected to increase costs in supply chains.
Housebuilders across the FTSE 100 and FTSE 250 are down 1.5pc today after their strongest day in 18 months on Wednesday following a surprise drop in inflation.
11:32 AM GMT
FTSE 100 climbs as traders bet on interest rate cuts
The FTSE 100 hit its highest level in more than a month after weaker than expected inflation and growth raised bets on interest rate cuts.
The blue-chip index gained as much as 0.9pc while the domestically-focused FTSE 250 gained as much as 0.4pc.
Rightmove led gains as traders brought forward their expectations for interest rate cuts by the Bank of England.
Money markets indicate there is a 91pc chance of the Bank of England reducing borrowing costs next month, with a further cut in rates priced in by August.
The FTSE 100 jumped more than 1pc on Wednesday when official figures showed inflation slowed unexpectedly last month, with core measures of price growth - tracked by the Bank of England - falling more sharply.
It comes as a relief to Rachel Reeves, who acknowledged the UK was facing “economic headwinds” after government borrowing costs increased and the value of the pound slumped.
Both the pound and bonds have rallied following the latest official figures.
Global markets were also given a boost on Wednesday after easing core US inflation kept potential rate cuts by the Federal Reserve on the table.
11:19 AM GMT
UK economy ‘sliding back into recession’, says think tank
The UK economy is “sliding back into recession”, a right-leaning think tank has warned after growth was weaker than expected in November.
Julian Jessop, economics fellow at the Institute of Economic Affairs, warned the “measly” 0.1pc increase in GDP meant the best Chancellor Rachel Reeves can hope for is that the economy stagnated in the fourth quarter of last year.
It comes after the Office for National Statistics in December revised lower its estimate for GDP in the third quarter to 0pc.
He said: “The UK is not yet in recession in terms of overall GDP, but output per head did fall in in the third quarter of last year and almost certainly did so again in the fourth.
“The most likely scenario is still a shallow downturn, with inflation only rising a little further and unemployment remaining relatively low. This could best be described as ‘stagflation-lite’.
“Nonetheless, the economy will struggle to get anywhere near the growth numbers baked into the OBR’s forecasts for the Budget.
“The Government needs to come up with a credible plan to solve the productivity puzzle, rather than simply double-down on the current policies of more tax, more public spending, and more state intervention.”
11:06 AM GMT
Defaults rise for longest period since at least 2007
The number of households defaulting on their mortgage has risen consistently for two years, a survey by the Bank of England of lenders suggests.
Lenders reported rising mortgage defaults every quarter in 2023 and 2024, the longest period of increases recorded since the survey began in 2007. This points to defaults rising for longer than during the financial crisis.
It comes after interest rates surged to their highest level since 2008, hitting millions of borrowers on expiring deals with far higher mortgage costs.
10:57 AM GMT
Bonds rally amid hopes for interest rate cuts
Government borrowing costs have eased after weak economic growth cemented bets that the Bank of England will cut interest rates next month.
Gilts have rallied, with the rate-sensitive two-year yield down five basis points to 4.4pc after Britain’s economy expanded by 0.1pc in November.
The benchmark 10-year bond yield was down to 4.7pc, having hit a 17-year high of 4.92pc last week.
HSBC’s senior UK economist Liz Martins said the “mood music is not great” with the UK economy stagnating.
She told BBC Radio 4’s Today: “We had zero growth in the third quarter of this year, a bad start to the fourth quarter, and this number hasn’t done enough to offset that bad start.
“So it does suggest that we’re going to have very low or zero growth for the final quarter as well.
“We’re not in recession but we’re not doing much growing either.”
09:59 AM GMT
There’s one bright spot in the economy. The tax raid is about to snuff it out
Rachel Reeves can thank the Great British consumer for helping prop up the economy in November.
Britain eked out the tiniest scrap of growth in the month, with GDP edging up 0.1pc. That is less than the 0.2pc expansion analysts anticipated, but still better than the contractions recorded in the previous two months that put the country at risk of a recession.
Unfortunately for the Chancellor – and, more importantly, the rest of us – she is in danger of snuffing out even that meagre growth with record-breaking tax rises, led by a £25bn shock National Insurance raid on employers.
These three charts show how Britain’s weak growth is at risk.
09:33 AM GMT
Starmer says ‘much more to do’ as economy grows 0.1pc
Sir Keir Starmer said the latest economic growth figure was “a step in the right direction, but there’s much, much more we’ve got to do”.
The Prime Minister told broadcasters during a visit to Ukraine that the Government would be “unrelenting” in its pursuit of economic growth.
He said: “It was always going to take time to turn around 14 years of economic failure under the last government. That was always going to take time.
“The figures out today are a step in the right direction, but there’s much, much more we’ve got to do and that we will do.
“We’re going to be unrelenting when it comes to driving our economy forward - changing the planning rules, changing regulation.
“The Chancellor’s having a session today with the regulators. We’re unrelenting on this because we intend to turn this around, to get back economic growth.”
09:25 AM GMT
Reeves to quiz regulators over removing barriers to growth
Rachel Reeves is holding a meeting with regulators in No 11 today as she attempts to cut red tape and remove barriers to investment to kickstart sluggish growth.
Ms Reeves and Business Secretary Jonathan Reynolds will gather the bosses of the Competition and Markets Authority, Ofcom, Ofwat, Ofgem, the Office of Rail and Road, the Environment Agency and the Civil Aviation Authority to look at reforms to the way they work.
It comes amid mounting fears the economy is heading for a period of so-called stagflation, where there is little or no economic growth combined with persistent inflation.
The Bank of England has pencilled in no growth again for the fourth quarter, following zero expansion in the previous three months.
And while figures on Wednesday showed inflation edging back to 2.5pc last month from 2.6pc in November, many economists believe it will rise close to 3pc in the coming months.
Thomas Pugh, UK economist at RSM UK said: “Overall, the economy stagnated in the second half of last year.”
He added: “The lack of momentum going into the year raises the risks that 2025 under performs expectations.”
09:06 AM GMT
UK markets ‘remain fragile’ amid weak growth
The pound has fallen and government borrowing costs held firm after the economy grew by less than expected in November.
Sterling was down 0.3pc against the dollar to $1.22 while the yield on 10-year UK gilts - a benchmark for government borrowing costs - stood at 4.73pc, down from 17-year highs of 4.92pc last week.
Kirstine Kundby-Nielsen, a strategist at Danske Bank, said: “UK markets remain fragile.
“Weaker than expected growth data for November out this morning and plenty of event risk for next week in terms of Trump’s inauguration and UK wage data out on Tuesday could reignite the sell-off.”
08:51 AM GMT
Growing the economy takes time, says Reeves
Chancellor Rachel Reeves acknowledged it would take time to revive the UK economy.
Asked if she had snuffed out growth since taking office, she said: “The truth is the British economy has barely grown for the last 14 years and that’s why we’ve had a cost-of-living crisis and why British people are worse-off.
“This new Government has come in with a determination, a number one mission, to grow the economy. That takes time.”
She said the Government had announced a series of measures to boost growth, including the Prime Minister’s focus on AI and her own trip to China.
She defended her Budget decisions, insisting “the most important thing to grow the economy is returning stability” which she had done by addressing the public finances.
She said: “We saw that under the last Conservative government, when they played fast and loose with the public finances, it is ordinary working people that pay the price.
“So, I’ve drawn a line under that instability and ensured that the sums now add up. Combined with investment and reform, I’m determined - and I’m confident - that we can grow our economy and make people better-off.”
08:35 AM GMT
Budget tax hikes have ‘dragged economy to stagnation’
Rachel Reeves has been blamed for having “dragged the economy into stagnation” with her talk of a “£22bn black hole” in the public finances as official figures showed growth was weaker than expected in November.
The Chancellor raised taxes by £40bn in the October Budget, having warned repeatedly in the lead up to the event that her economic inheritance meant she would have to fix the public finances.
The economy grew by 0.1pc in November following five months of no growth, despite the Government inheriting the fastest-growing economy in the G7 in the first six months of last year.
As a result, the consultancy Pantheon Macroeconomics has cut its forecast for the fourth quarter to stagnation, having previously forecast 0.1pc growth.
Chief UK economist Rob Wood said: “Budget tax hikes and global uncertainty driven by Mr Trump’s potential policies dragged the economy into stagnation in the second half of last year, with November GDP doing little to relieve the gloom.”
He added: “GDP growth slowed markedly in the summer when the new government began warning of tax hikes.”
Anna Leach, chief economist at the Institute of Directors, said: “November coincided with a new post-Covid low for the IoD’s Economic Confidence Index as business leaders were left reeling from a worse-than-expected Budget for business.
“The economy now seems likely to have ground to a halt over the second half of 2024.”
08:03 AM GMT
UK markets rise amid hopes for rate cuts
The FTSE 100 opened higher as weak growth in the economy raised hopes that the Bank of England will cut interest rates.
The UK’s blue-chip stock index rose 0.6pc to 8,348.99 while the midcap FTSE 250 gained 0.4pc to 20,403.24.
08:00 AM GMT
Business Secretary worried about Trump tariff war amid weak growth
Jonathan Reynolds said he was worried about a potential tariff war as Donald Trump is due to return to the White House.
“It’s going to be a challenging time for anyone who is responsible for trade in a big economy because of some of those pledges that were made in the campaign,” he told Sky News.
Asked if he was worried about a tariff war, the Business Secretary said: “I am, because the UK is a very globally-orientated economy, so the exposure, the danger to the UK is actually greater than even some comparable countries around that.
“So, a lot of our work has been preparing for that, engaging early with the new administration.”
He added: “Ultimately, tariffs are paid for by your own people. So, it’s got real pressures in terms of inflation, in terms of your ability to employ people, to export to other markets.”
He said the UK was “well prepared” and had a “good argument to make” in trade talks with the US, and there is a “chance to get an even better relationship”.
07:45 AM GMT
Economy ‘continues to be stuck in a worrying rut’
Britain’s growth has been well and truly flattened, economists warned, with the nation now perilously close to recession.
Hetal Mehta, head of economic research at St. James’s Place, said the UK is now suffering both stagnation and inflation, a combination which evokes the dire years of the 1970s.
She said: “The GDP data are the first positive growth numbers since August, but only just. The overall picture is one of stagflation.”
Stuart Morrison at the British Chambers of Commerce cautions that it is only higher Government borrowing and spending which is likely to push up growth this year - not business activity in the demoralised private sector.
“With no growth in the three months to November 2024, and a very limited uptick for the month itself, it’s clear that the UK economy continues to be stuck in a worrying rut,” he said.
“Our latest forecast expects GDP to pick up slightly in 2025 and 2026, but this is driven largely by increased government spending. Right now, firms are struggling to deal with a raft of extra costs following the Budget. Investment levels are likely to remain low for the foreseeable future, as businesses try to balance their books.”
It means the Bank of England may be Rachel Reeves’s best hope for a fresh spark in the economy.
“Given the latest inflation reading yesterday, weaker than expected growth could pave the way for faster rate cuts by the Bank of England,” said Barret Kupelian, chief economist at PwC.
“This could be a helpful tailwind to the economy at a time when the international outlook becomes more unpredictable.”
07:38 AM GMT
Traders raise bets on third rate cut this year
Traders have increased bets on the Bank of England cutting interest rates three times this year after growth was weaker than expected.
Money markets indicate there is a 29pc chance of a third cut in December, compared to 25pc at the close of play on Wednesday.
Traders had only been pricing in one cut this year before the unexpected decline in the consumer prices index in December raised hopes that the Bank of England will be able to lower borrowing costs.
Derivatives trades now indicate there is a 90pc chance of a reduction in the Bank Rate from 4.75pc to 4.5pc, with a second cut priced in to happen by September.
07:25 AM GMT
Reeves has ‘put the handbrake on the economy’, say Lib Dems
After growth was weaker than expected in November, Liberal Democrat Treasury spokesman Daisy Cooper said: “The Chancellor has put the handbrake on the economy with her misguided jobs tax and the consequence is this pitiful rate of growth.
“Every month this persists means less money in struggling families’ pockets and public services without the funding they need.
“After years of the Conservatives’ economic vandalism, the public was crying out for change but this new Government is falling well short of fixing this mess.
“Rachel Reeves needs to see sense and scrap her foolish jobs tax, and pursue a real strategy for growth like fixing our broken trade relationship with our European partners and replacing the broken business rates system.”
07:20 AM GMT
Third month in a row of disappointing growth, says Stride
Shadow chancellor Mel Stride said: “Labour inherited the fastest-growing economy in the G7, but this is the third month in a row of disappointing growth figures.
“The Chancellor seems content with burying her head in the sand, but this is a crisis made in Downing Street. We need an urgent change of course.”
07:18 AM GMT
Pound falls as economy grows less than expected
The pound has dropped following data showing Britain’s economy mustered growth of just 0.1pc in November.
Sterling was last down 0.2pc against the dollar at $1.221 and was 0.3pc lower versus the euro, which is worth 84.3p.
Neil Birrell of Premier Miton Investors said: “Perhaps a combination of improving inflation and a weaker economy will spur the Bank of England on to look at cutting interest rates at their next meeting.
“However, inflation hasn’t gone away, but the economy needs stimulus from somewhere.”
Lindsay James of Quilter Investors added: “It appears the Chancellor has a large task ahead, given she is banking on growth to drive the economy.”
07:09 AM GMT
Reeves ‘determined to go further and faster to kickstart growth’
After Britain’s economy grew by just 0.1pc in November, Chancellor Rachel Reeves said:
I am determined to go further and faster to kickstart economic growth, which is the number one priority in our Plan for Change.
07:07 AM GMT
Economy continues to be broadly flat, says ONS
After the economy grew by less than expected, ONS Director of Economic Statistics Liz McKeown said:
The economy continues to be broadly flat, having growth slightly in November following two small falls in the previous months.
07:03 AM GMT
Economy grows less than expected in setback for Reeves
Britain’s economy grew by less than expected in November, official figures show, in a setback for Rachel Reeves as she battles to balance the public finances.
Gross domestic product (GDP) expanded by 0.1pc during the first month after the Chancellor delivered her Budget, according to the Office for National Statistics (ONS). Analysts had expected a 0.2pc expansion.
Ms Reeves announced £40bn of tax rises including a hike in employers’ national insurance in October.
The weak growth in November follows two consecutive months of 0.1pc contractions in the economy.
She has acknowledged the UK has been facing “economic headwinds” since the turn of the year after government borrowing costs increased and the value of the pound slumped.
She defended her trip to China and management of the public finances during an appearance in the Commons this week.
Markets calmed on Wednesday after official figures showed a surprise fall in inflation in December.
The Chancellor will hold a meeting with regulators in No 11 as she attempts to cut red tape and remove barriers to investment to kickstart sluggish growth.
07:01 AM GMT
Good morning
Thanks for joining me. We start the day with the latest official data on the output of Britain’s economy, which has eased/heaped further pressure on Rachel Reeves.
Gross domestic product (GDP) expanded by 0.1pc in November, according to the Office for National Statistics.
The data threatens to reignite upheaval in financial markets amid concerns that a lack of growth will force the Chancellor to raise taxes or cut public spending.
5 things to start your day
1. Labour branded ‘a hindrance’ to hiring as jobs boom runs out of steam | Starmer’s own policies risk undermining pledge to boost employment, warns recruitment boss
2. The ways Reeves’s new sidekick could reshape the welfare state | The long-honed ideas of new Treasury minister Torsten Bell may finally be put into action
3. BT scraps plan for 60,000 electric car chargers after installing just one | Telecoms giant to focus on boosting Wi-Fi access after abandoning ‘once in a lifetime’ scheme
4. The job market gloom that signals a looming recession | Full impact of hiring crisis not yet apparent, warn experts as businesses brace for NI costs
5. Build more roads to hit net zero, MPs told | Infrastructure tsar urges ministers to prioritise drivers over rail passengers to help relieve ‘pinch points’
What happened overnight
Asian markets extended a global rally Thursday after below-forecast US inflation provided a much-needed shot of relief to investors and revived hopes for interest rate cuts this year.
Hong Kong, Sydney, Seoul, Taipei, Manila and Jakarta all piled on more than one percent, while there were also gains in Shanghai, Singapore and Wellington.
Tokyo also edged up but was limited by a pick-up in the yen against the dollar after the inflation data and as investors assess the chances of a rate hike by the Bank of Japan at its meeting next week.
US stocks surged on Wednesday, with all three major indexes registering their biggest daily percentage gains in more than two months, following lower than expected core inflation figures for December and strong earnings from major US banks.
The Dow Jones Industrial Average rose by 1.65pc to 43,221.55, the S&P 500 jumped by 1.83pc to 5,949.91 and the Nasdaq Composite increased by 2.45pc to 19,511.23.
These were the largest daily percentage gains for all three indexes since the day of the US election results on November 6. The Russell 2000 index of small-cap stocks also rose by 1.99pc.
US Treasury yields fell to 4.651pc, down from a 14-month high of 4.809pc earlier in the week.
Bank share prices rose following a swathe of strong earnings reports, with the likes of JPMorgan reporting a record annual profit. JPMorgan shares jumped by 1.97pc while Goldman Sachs soared by 6.02pc and Citigroup shot up by 6.49pc. The S&P 500’s bank index rose by 3.37pc.