Who said recession couldn’t be avoided?

World Cup boost helped economy GROW in November despite Bank boss’s warning of a record-breaking slump

BRITAIN looks set to avoid an immediate downturn as official figures showed yesterday that the economy grew by 0.1 per cent in november.

The latest GDP data from the office for national statistics defied economists’ predictions of a 0.2 per cent decline, raising questions about why the Bank of england and office for Budget Responsibility have been so pessimistic.

The figures came as the FTSE 100 index of UK-listed stocks raced close to a record high yesterday – ending above the 7,800 mark for only the third time in its history, at 7,844.07.

conservative MP Anthony Browne, a member of the Treasury select committee, said: ‘The Government and Bank of england forecasts have been too gloomy. The economy is showing signs of being a lot more resilient.

‘There is a cost of living crisis and people are tightening their belts but otherwise it doesn’t feel that much like previous recessions.’

over the past few months, the Bank of england has presented a recession as a foregone conclusion. As recently as november, Governor Andrew Bailey said the UK faced its longest recession since records began, with the country set for a ‘very challenging’ two-year slump.

And chancellor Jeremy Hunt said in november’s autumn statement that OBR forecasts showed Britain was already in recession.

James smith, economist at ING bank, said warnings of a deep recession were exaggerated, predicting a ‘mild’ downturn.

However, the broader picture on growth still looks gloomy, with the economy 0.3 per cent smaller in the three months to november compared with the prior three months. inflation is at a near four-decade high and the Bank of england has responded by increasing interest causing additional pain for borrowers. in november, football fans gathered in pubs to watch the World cup as england progressed towards the quarter-final, helping to boost the food and drink industry by 2.2 per cent.

There was also a boon for employment agencies as they sought to fill near record vacancies, while pre-christmas spending on video games helped too. But there was a 0.5 per cent decline for manufacturing.

The economy would be in recession if it shrinks for two quarters in a row. it shrank by 0.3 per cent in the third quarter, from July to september, so recession would be confirmed with a contraction in the last three months of 2022.

But the prospects of that have eased. GDP grew by 0.5 per cent in october and has now beaten expectations by growing in november. it would need to shrink by 0.5 per cent in December for the fourth quarter to turn negative.

Kitty Ussher, chief economist at the institute of Directors, said: ‘it is no longer certain the economy will meet the technical definition for recession when the final data for 2022 is in.’