Insights ¦ Monthly Economic Review November 2025

Key Take Aways

1. The UK economy demonstrated unexpected resilience in the first half of 2025, with the October forecasted GDP growth revised upward, likely reflecting a more optimistic outlook than March’s initial projections.
2. The forthcoming autumn budget will be pivotal amid heightened economic uncertainty and strained public finances, prompting a close watch on potential tax and spending adjustments.
3. The Office for Budget Responsiblity (OBR) is expected to downgrade its productivity growth forecasts, which could significantly influence public sector borrowing requirements and fiscal planning.
4. Despite a modest pick-up in private consumption, weaker government spending and business investment profiles are anticipated, with ongoing global uncertainty impeding net trade growth.
5. The UK’s debt-to-GDP ratio remains below the G7 average but is projected to remain near 100% in the near term, maintaining pressure on fiscal policy decisions.
6. Business confidence, especially among SMEs, remains subdued with a net balance of just 5% expecting performance improvements over the next year, reflecting ongoing economic caution.
7. Manufacturing activity showed signs of improvement, partly driven by a phased return to production at Jaguar Land Rover following a cyber-attack, although supply chain disruptions persist.
8. Vehicle output in September was down 27% on the previous year, with cumulative year-to-date declines affecting the automotive sector’s recovery trajectory.
9. The US government shutdown brokerage highlights risks linked to political impasses, though impacts on the US economy appear limited so far, with some data series temporarily unavailable.
10. The Federal Reserve’s rate cut last month indicated ongoing uncertainty; future monetary policy moves remain uncertain due to limited current economic data.
11. Global trade tensions showed signs of easing following US diplomatic efforts in Asia, notably with China, which resulted in tariff reductions and commitments to curb fentanyl exports.
12. The UK financial services sector is preparing to present policy recommendations, with upcoming publications providing further insights into market forecasts, fraud trends, and mortgage data.

Key Statistics

• UK GDP growth forecast for 2025 upgraded to approximately 1.4% from March’s halved forecast.
• Private consumption expected to pick up in 2026; government spending and business investment remain weak.
• Productivity growth projection downgraded, with around 1.2% growth pencilled in annually from 2027.
• UK debt to GDP ratio is set to stay below the G7 average, approaching 100% but remaining manageable.
• Business performance expectations, per the ONS BICS survey, show a net balance of +5%, a recovery from lows but still subdued.
• September vehicle production declined 27% year-on-year; year-to-date output down over 8%.
• The US government shutdown prevented release of key monthly economic data; extra caution required in policy decisions.
• The Federal Reserve cut rates by 25 basis points last month; future cuts uncertain amid macroeconomic uncertainty.
• US diplomatic talks led to reductions in tariffs and increased access to rare-earth minerals with China.
• CPI inflation in the UK stood at 3.8% in September 2025, with the Bank Rate at 4.0%.
• Exchange rate stood at $1.34 per GBP in September 2025.

Key Discussion Points

• The UK economy’s resilience amid global uncertainty is shaping revised fiscal and monetary policy expectations.
• The upcoming autumn budget will be critical in defining fiscal stance amidst strained public finances and potential tax reforms.
• Downward revisions to productivity growth forecasts could elevate borrowing needs and influence fiscal sustainability.
• Global economic factors, including trade tensions and US political developments, are influencing UK and international markets.
• The impact of the Jaguar Land Rover cyber-attack underscores vulnerabilities within manufacturing supply chains.
• The automotive industry’s recovery trajectory remains uncertain, with output impacted by cyber-attack and ongoing transition to electric vehicles.
• UK SMEs continue to exhibit cautious outlooks, with persistent challenges from taxation and global trade tensions.
• US government shutdown risks, while currently limited, could escalate and influence market and economic confidence.
• The Federal Reserve’s monetary policy path remains uncertain due to limited real-time economic data and macro risks.
• Diplomatic negotiations with China and other Asia-Pacific countries hint at easing of trade tensions, but long-term implications remain fluid.
• Financial services are preparing strategic policy submissions ahead of budget statements; close monitoring is advised.
• The overall macroeconomic outlook underscores the importance of balancing fiscal and monetary policy amid persistent uncertainties.

Document Description

This article offers a comprehensive review of the UK and global economic landscape as of November 2025. It examines forthcoming fiscal policy decisions, recent macroeconomic data, and geopolitical developments influencing financial markets. Key areas include UK economic resilience, fiscal forecasts, sector-specific disruptions such as the automotive supply chain, and international trade tensions, notably US-China relations. The review also considers monetary policy signals from the Federal Reserve and the ongoing implications of the US government shutdown. It aims to inform senior managers in financial services about current trends, policy shifts, and strategic considerations in an environment marked by notable uncertainty.