The FTSE 100 (^FTSE) and European stocks were lacklustre on Thursday as the UK economy beat forecasts and grew by 0.3% in November thanks to car production rebounding and a boost from the services sector.

According to the Office For National Statistics (ONS), the figures were helped by the return to production at Jaguar Land Rover’s facilities after a cyber-attack at the carmaker.

Read more: UK economy grew by more than expected in November despite budget uncertainty

November’s growth figure was stronger than analysts’ expectations of a 0.1% increase, and in another boost, September’s growth figures were revised higher, showing that the economy did not shrink that month after all.

The UK’s services sector, which makes up around three-quarters of the economy, expanded by 0.3% during the month, while production also grew, with output rising by 1.1%. However, construction shrank by 1.3%, with builders reporting a drop in new work, and repair and maintenance.

Yael Selfin, chief economist at KPMG UK, said the figures showed economic activity had accelerated despite uncertainty in the lead up to the budget.

“Despite the relatively mooted consumer sentiment so far and consumer-facing services output declining in November, there are some tentative signs of a pick-up in household spending,” she said.

“With the worst of the uncertainty behind businesses, we expect growth momentum to continue over the coming months.”

The news means an interest rate cut from the Bank of England next month is less likely. Traders are betting there is a 6% chance of a reduction in borrowing costs in February, down from 7% on Wednesday.

Money market pricing indicates policymakers are expected to cut rates in April, although the chances of this were reduced from 93% yesterday to 91% today.

Suren Thiru, economics director at ICAEW, said: “These figures make a February interest rate cut less likely by giving those rate-setters still concerned over inflation with sufficient comfort over economic conditions to delay voting to ease policy again.”

  • London’s benchmark index (^FTSE) was hovering around the flatline in early trade.

  • Germany’s DAX (^GDAXI) slipped 0.2% and the CAC (^FCHI) in Paris was also treading water.

  • The pan-European STOXX 600 (^STOXX) was up 0.3%.

  • Wall Street is set for a positive start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the green.

  • The pound was flat against the US dollar (GBPUSD=X) at 1.3440.

Follow along for live updates throughout the day:

LIVE 3 updates

  • UK economy grew by more than expected in November

    The UK economy returned to growth in November, despite uncertainty in the run up to chancellor Rachel Reeves delivering the autumn budget.

    The UK’s gross domestic product (GDP) is estimated to have grown by 0.3% in November, according to Office for National Statistics (ONS) data released on Thursday. This was better than forecasts for 0.1% growth and followed an unrevised fall of 0.1% in October.

    Services output increased by 0.3% in November and production grew by 1.1%, though construction output fell by 1.3%.

    In the three months to November, the ONS data showed that UK GDP grew by 0.1%, after showing no growth in the previous three months, which was revised up from a fall of 0.1%.

    Liz McKeown, director of economic statistics at the ONS, said:

  • Asia and US overnight

    Stocks in Asia were mixed overnight, but tech ‍shares were met with more selling. The Nikkei (^N225) slipped 0.4% on the day in Japan, where it looks increasingly as though prime minister Takaichi is going to call a snap election. That hasn’t been officially confirmed, but Hirofumi Yoshimura, who is the leader of the Japan Innovation Party, said that Takaichi had told colleagues that she’d be dissolving the lower house soon after it reconvenes on 23 January.

    Meanwhile the Hang Seng (^HSI) fell 0.3% in Hong Kong and the Shanghai Composite (000001.SS) was also 0.3% down by the end of the session.

    In South Korea, the Kospi (^KS11) added 1.6% on the day, on track for another record high this morning.

    Currencies paused for breath after the yen dropped to its weakest point since July 2024 against the US dollar overnight and then bounced back sharply amid warnings of possible intervention by Japanese authorities.

    Japanese bond yields eased back from record peaks following a spike driven by speculation – which was later confirmed – that the government will call snap elections, a scenario that is expected to lead to bigger fiscal stimulus.

    Across the pond, Wall Street declined last night after fourth-quarter results from some US banks, including Bank of America (BAC) and Wells Fargo (WFC), disappointed investors.

    The S&P 500 (^GSPC) fell 0.5% during the session thanks to a slump for tech stocks, with the Magnificent 7 down 1.56%, in contrast to most of the S&P’s constituents which rose yesterday, with 318 moving higher.

    The tech-heavy Nasdaq (^IXIC) was 1% lower at the closing bell and the Dow Jones (^DJI) lost 0.1%.

  • Coming up

    Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what’s moving markets, and what’s happening across the global economy.

    Looking at the day ahead, data releases include the UK GDP and Euro Area industrial production for November. Then in the US, we’ll get the weekly initial jobless claims, the Empire State manufacturing survey for January, and the Philadelphia Fed’s business outlook for January.

    From central banks, the ECB will publish their Economic Bulletin, we’ll hear from ECB Vice President de Guindos, the ECB’s Panetta, and the Fed’s Bostic, Barr, Barkin and Schmid. Finally, earnings releases include Goldman Sachs, Morgan Stanley, and BlackRock.

    Here’s a snapshot of what’s on the agenda:

    • 7am: Trading updates: Taylor Wimpey, Dunelm, Safestore, Ashmore, Rathbones, Oxford Instruments, Hostelworld, Robert Walters, Fuller, Smith & Turner, CAB Payments, Brooks Macdonald

    • 7am: UK GDP report for November

    • 7am: UK trade report for November

    • 9am: German full year GDP report

    • 1.30pm: US initial jobless claims report

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