The UK economy returned to a reverse gear in November as tightened coronavirus restrictions took their toll on the fightback from the steepest recession on record, according to official figures.
The Office for National Statistics (ONS) reported an estimated 2.6% drop in output during the month – building on a loss of momentum that began late last summer.
November was the month that England joined other parts of the UK in a second lockdown.
The first, which was UK-wide and began in March, was responsible for tipping the nation into the unprecedented slump that saw most of the economy placed in virus hibernation.
The ONS said the economy was 8.5% below its pre-pandemic level by November and experts have warned that the UK faces the prospect of a double-dip recession given measures to contain COVID-19 since then.
However, the 2.6% negative growth figure for November was much better than the 5.7% slump economists had predicted.
The ONS also upwardly revised October’s growth to 0.6% from an earlier estimate of 0.4% and said it was clear that the impact of restrictions in November were less severe than during the first lockdown as more businesses operated.
The governor of the Bank of England, Andrew Bailey, cast doubt on the prospect of a new recession when he told business leaders in Scotland this week that he expected output in the final quarter of last year to be flat to slightly negative.
Nevertheless, November’s decline still represented the first monthly drop in output since April.
On a sector-by-sector basis, construction saw the best growth while services, which accounts for almost 80% of the economy, and factory output both declined.
Chancellor of the Exchequer Rishi Sunak, who conducted a spending review in November to bolster the government’s response to the crisis, responded: “It’s clear things will get harder before they get better and today’s figures highlight the scale of the challenge we face.
“But there are reasons to be hopeful – our vaccine roll-out is well underway and through our Plan for Jobs we’re creating new opportunities for those most in need.
“With this support, and the resilience and enterprise of the British people, we will get through this.”
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said of the figures: “The relatively modest fall in GDP in November shows that many businesses have adapted well to lockdown conditions.
“Unlike in the Spring, manufacturers and construction firms remained open in November, as did schools.
“Retailers also provided click-and-collect services and had enhanced their capacity to provide online deliveries, ensuring that output in the distribution sector was only 5% below its pre-COVID peak in November.
“Similarly, many cafes and restaurants continued to trade by providing takeaway services, limiting the shortfall in output in the broader accommodation and food service sector from its peak to 63% in November, greatly improving on April’s 90% decline.
“Meanwhile, many services firms appear to have adjusted well to all staff working from home, with output little different to October.”