The economy grew by 0.1% in November, partly aided by the football World Cup, according to official figures which call into question predictions the UK is already in recession.
Data from the Office for National Statistics (ONS) showed pressure on demand from the effects of high inflation, but a boost from people packing pubs and bars to watch events unfold in Qatar.
Economists had predicted a negative growth figure – of around 0.2%.
The figure for November came on the back of a positive growth reading the previous month, largely explained by activity getting back to normal after disruption to output from the late Queen’s death.
The additional bank holiday for the funeral in September saw most businesses close.
The Bank of England is among public bodies to have forecast that the UK fell into recession during the third quarter of 2022.
Should a reading by the ONS for the October to December period show a negative growth figure, then the economy will have met the criteria for recession: two consecutive quarters of contraction.
A fairly severe downwards shift in output last month is seen as unlikely.
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1:24
Egg on the faces of the recession forecasters?
The ONS said that gross domestic product (GDP) fell by 0.3% in the three months to November.
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That incorporates the decline of 0.6% in output measured during September and the 0.5% recovery in October.
ONS director of economic statistics Darren Morgan said: “The economy grew a little in November, with increases in telecommunications and computer programming helping to push the economy forward.
“Pubs and bars also did well as people went out to watch World Cup games.
“This was partially offset by further falls in some manufacturing industries, including the often-erratic pharmaceutical industry, as well as falls in transport and postal, partially due to the impact of strikes.
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1:50
Firms fret over energy-led costs
“Over the last three months, however, the economy still shrank – mainly due to the impact of the extra bank holiday for the funeral of Her Majesty Queen Elizabeth in September.”
He told BBC Radio 4’s Today programme that the economy would need to shrink by 0.6% or more in December for the fourth quarter of 2022 to contract as a whole – triggering a technical recession.
Family incomes are shrinking despite recession avoided
The prospect of avoiding such a downturn is easing not only in the UK but across Europe and in the US too, but it does not mean that all is rosy.
Business groups warned that many sectors were struggling – and needed the support of government to protect jobs as energy-led costs continue to stifle orders and investment.
Pressure on squeezed consumers too is set to intensify as the Bank of England is still forecast to maintain interest rate increases to help inflation ease over the first half of 2023, raising bills in the process as mortgage costs climb.
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2:37
Food inflation reaches record levels
In its reaction to the GDP data, the living standards-focused think-tank the Resolution Foundation said that while a 2022 recession was now likely to have been avoided, family incomes were still shrinking.
Jonathan Moyes, head of investment research at the Wealth Club investor service, said of the UK’s prospects: “We have seen retailers report stronger than expected earnings reports for Q4 over the past week, and it appears a stronger than expected consumer services, and services more broadly, have helped the UK economy defy gloomy expectations.
“It may be too soon to mark the beginning of a turn in sentiment for the UK, but a quiet consensus appears to be forming.
“Energy prices are falling sharply, China is reopening and interest rate expectations have eased significantly,” he wrote.
Talks between Donald Trump, Volodymyr Zelenskyy and European leaders have taken place at the White House, aimed at finding an end to the war in Ukraine.
On the agenda were US security guarantees, whether a ceasefire is required, and a potential summit between the Ukrainian president and Vladimir Putin.
Here’s what three of our correspondents made of it all.
For Trump
For Mr Trump, the challenge to remain seen as the deal-broker is to maintain “forward momentum, through devilish detail,” Sky News’ US correspondent James Matthews says.
The US president called the Washington summit a “very good early step”, but that’s all it was, Matthews says.
Despite cordiality with Mr Zelenskyy and promising talk of a US role in security guarantees for Ukraine and discussions for meetings to come. Matthews says the obstacles remain.
“Trump has taken peace discussions to a distance not travelled since the start of the war, but it is a road navigated by a president playing both sides who have changed his mind on key priorities.”
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1:25
Zelenskyy, Trump and the suit
For Putin
As for Russia, Sky News’ Moscow correspondent Ivor Bennettsays the aim is to keep Trump on its preferred path towards peace – a deal first, a ceasefire later.
“Moscow believes that’s the best way of securing all of its goals,” Bennett says.
But Ukraine and Europe want things the other way round, and Moscow “will be wary that Trump can be easily persuaded by the last person he spoke to”.
And so, Russia will be “trying to keep themselves heard” and “cast Kyiv as the problem, as they won’t agree to a peace deal on the Kremlin’s terms”.
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0:36
What’s Putin’s next move? Sky’s Ivor Bennett explains
For the UK and Europe
Sky News’ deputy political editor Sam Coates says, for Sir Keir Starmer and Europe, the biggest success of the Washington summit was the US promise of security guarantees for Ukraine.
He adds that the “hard work starts now to actually try to figure out what these guarantees amount to”.
Sir Keir said if Vladimir Putin breaches a future peace deal, there would have to be consequences, but Coates said potentially “insoluble” issues stand in the way.
“At what point do those breaches invoke a military response, whether US guarantees would be enough to encourage European involvement in Ukraine, and whether or not you could see the UK and Europe going to war with Russia to protect Ukraine?”
Coates says “there may never be an answer that satisfies everyone involved”.
Hamas has agreed to a ceasefire-hostage deal with Israel, according to a senior official.
Egyptian and Qatari mediators have been holding talks with Hamas in their latest effort to broker a ceasefire with Israel in Gaza.
The Hamas official did not provide further details of the agreement or what had been accepted.
Hamas has responded positively to such deals in the past, while proposing amendments which have proved unacceptable to Israel.
Sky’s International Correspondent Diana Magnay in Jerusalem said the agreement appears to be similar to the plan put forward by Donald Trump’s Middle East envoy, Steve Witkoff, for a 60-day ceasefire deal.
“What we understand from Hamas, in relation to this deal, is that it would be within the 60-day ceasefire framework, but it would be a release of prisoners and detainees in two parts.
“What we understand from Arab channels is that Hamas agreed to it without major alterations,” she said.
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An Egyptian official source told Reuters that, during the ceasefire, there would be an exchange of Palestinian prisoners in return for the release of half of the Israeli hostages held in Gaza.
There has been no word from Israel about the proposed ceasefire.
Diana Magnay said it is clear that mediators from Egypt and Qatar, potentially along with Hamas, felt under pressure because of Benjamin Netanyahu’s plan to push further into Gaza City, “and that’s why you’ve had mediators over the weekend in Cairo trying to get some kind of plan on the table.”
“So the big question is, will Benjamin Netanyahu agree to this? We shall have to see whether it is his intention at any point to agree to a ceasefire or whether this is just too late now and he will use the opportunity to push on in Gaza,” she added.
Earlier on Monday, US President Donald Trump appeared to cast doubt on peace talks.
“We will only see the return of the remaining hostages when Hamas is confronted and destroyed!!! The sooner this takes place, the better the chances of success will be,” he posted on his Truth Social site.
Egypt’s Foreign Minister Badr Abdelatty said mediators had been “exerting extensive efforts” to revive a US proposal for a 60-day ceasefire, during which hostages would be released and the sides would negotiate a lasting cessation of violence.
Health authorities in Gaza said the Palestinian death toll from 22 months of war has passed 62,000.
This breaking news story is being updated and more details will be published shortly.
Russian President Vladimir Putin reportedly demands that he be given control of the whole of the Donbas as part – and only part – of his price for any peace deal with Ukraine.
The area referred to as “the Donbas” consists of two regions.
Russian forces currently occupy almost all of one of them – Luhansk – and about 70% of the other – Donetsk.
The Donbas is historically an important industrial area of Ukraine, where its coal mines and heavy industries are located, as well as many of its old arms manufacturing plants from the days when Ukraine was part of the Soviet Union.
The 30% of Donetsk that Ukrainian forces still hold, and would be required to give up under Mr Putin‘s demands, are very important to it for a number of reasons.
Image: The regions of Luhansk and Donetsk, which make up the Donbas in eastern Ukraine, have been subject to fierce fighting
Politically, it is not lost on all Ukrainians that Russia‘s 2014 takeover of parts of the Donbas (about 30% of the territory by the end of that year) began in the city of Sloviansk in the northern part of the unconquered Donbas.
The Ukrainians liberated that city from Russian-backed forces and have held onto it since, and paid a high price in lives and money to keep it free.
The same applies to the other cities and villages still under Kyiv’s control in Donetsk. It would be a bitter blow to Ukraine, and possibly even precipitate the removal of Volodymyr Zelenskyy as president – to give up to Russia territory that Ukraine has fought so hard to retain for the last 11 years.
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1:23
Zelenskyy ‘not authorised’ to give up territories
But this area also has an immediate strategic importance for Kyiv.
The four significant cities in this area form a 50 to 60km “belt” of strong fortifications.
Even the Russian military refer to Sloviansk, Kramatorsk, Druzhkivka and Kostyantynivka as the “fortress cities” and all the villages and settlements between them are well-defended, making best use of the topographical features on which they are situated.
If Ukrainian forces had to give up these strong positions they would not be able to withdraw westwards to other defensive positions anything like as strong.
In short, they would be ceding their best defensive positions to Russian forces who could then use them as a springboard for further attacks westwards towards the Dnieper River, which the Ukrainians would struggle to defend so easily.
The fact that Russian forces have been geographically close to Sloviansk and Kramatorsk for so long without being able to take them tells its own story of the effectiveness of the “fortress cities” to hold out against Russian attacks.
Not least, there would be some advantage to Russia in gaining access to mineral fields across that part of the Donbas which incudes workable, large deposits of lithium and titanium non-ferrous metals, and also some large rare earth deposits running in a north-south geological strip along the border between Donetsk and the neighbouring region of Dnipropetrovsk.
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4:34
‘Putin does not want to stop the killing’
Doubts over the value of Putin ‘security guarantees’
Some US officials have spoken about the possibility of obtaining credible security guarantees from Russia in the event that Ukraine agrees to Moscow’s terms.
It is fair to say that there is near-unanimous opinion, both among the public in Ukraine and (with only a couple of notable but minor exceptions) among political leaders in Europe, that no guarantees Mr Putin might offer would be worth anything.
His record in European security matters since he took power in Moscow in 1999 is of continual bad faith, deception, and treaty-breaking.
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1:50
What to expect of the Trump-Zelenskyy meeting
Russia guaranteed Ukrainian security in the Budapest Agreement of 1994 and then went on to conclude a Friendship Treaty with Ukraine in 1997 – but broke both of them by its first two invasions of Ukraine in 2014.
The Minsk Agreement and then a later “Minsk II”, followed that invasion to try to stabilise the situation.
But both of those agreements were broken very quickly by Russia.
Moscow claims these breaches were the fault of Kyiv, but the historical record gives that claim no credence.
On the eve of Russia’s full scale invasion on Ukraine in January/February 2022 Putin personally and repeatedly stressed to all the European leaders who contacted him that Russia had no intention of invading Ukraine – until the day came when it did.
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The fact is, there is simply no documentary or confirmed evidence that Mr Putin’s ambitions in Ukraine are restricted to the Donbas region.
But there is abundant documentary and confirmed public evidence to the contrary – that under Mr Putin’s leadership, Russia intends to conquer all of Ukraine and reabsorb it into the Russian federation.
Any “guarantees” that Mr Putin might offer along the way to this ultimate objective ought to be regarded as merely tactical and short-term.
Since he has honoured literally none of his previous agreements in relation to any aspect of European security, his record suggests he will break any new security guarantees as soon as he sees an advantage in doing so.