The UK economy saw a slight growth of 0.1% in November 2024, following a contraction of 0.1% in October, marking a positive shift after two consecutive months of decline.

Despite this growth, the figure fell short of economists' expectations, with notable declines in manufacturing and business rentals contributing to concerns.

This modest growth offers a glimmer of hope for the government, which has been grappling with rising inflation and increased borrowing costs.

However, the weak growth is partly attributed to Finance Minister Rachel Reeves' budget announced in late October, which included significant tax increases for businesses.

These tax hikes, along with rising National Insurance contributions, are expected to impact economic growth and consumer spending moving forward.

The recent financial turbulence has led to a rise in government borrowing costs, although these costs saw a sharp decline following an unexpected drop in inflation data.

The Bank of England has projected no growth for the fourth quarter of 2024, raising fears of prolonged stagnation amid high inflation rates.

In response to these challenges, Reeves plans to engage with regulators to discuss strategies aimed at reducing red tape and improving investment conditions.

Cooling inflation figures from January 2025 have eased some pressure on Reeves, potentially allowing for more flexibility in monetary policy.

While the recent GDP increase may provide the Bank of England with room to adjust the base rate, inflation and tax hikes remain significant hurdles.

Looking ahead, markets are skeptical about further rate cuts in early 2025, with expectations of only minor adjustments as the economy navigates ongoing pressures.

Reeves emphasized her commitment to overcoming years of economic stagnation and improving the financial well-being of working individuals in the UK.