UK economy grows by 0.4% in May

Unlock the Editor’s Digest for free

The UK economy grew by 0.4 per cent in May, double the expected figure, as the key services sector rebounded.

The month-on-month rise followed zero growth in April, the Office for National Statistics said on Thursday, and exceeded a 0.2 per cent forecast for May by economists polled by Reuters.

Sterling rose 0.1 per cent against the dollar to $1.2857 as the figures brought the UK’s annual gross domestic product growth to 1.4 per cent, higher than the 1.2 per cent economists had forecast. 

Traders in swaps markets remained evenly split on the chances of the Bank of England delivering its first interest rate cut at its next meeting on August 1.

Growth in May was driven by the services sector, which grew by 0.3 per cent. Production output was up 0.2 per cent and construction rebounded by 1.9 per cent following a sharp contraction in April, when wet weather hit activity.

In the three months to May, economic output was up 0.9 per cent compared with the previous three months, the fastest growth since January 2022.

Line chart of GDP index, 2019=100 showing UK GDP is estimated to have grown by 0.4% in May

Liz McKeown, director of economic statistics at the ONS, said “many retailers and wholesalers had a good month, with both bouncing back from a weak April”, while “construction grew at its fastest rate in almost a year after recent weakness, with house building and infrastructure projects boosting the industry”.

Labour, which swept to power in last week’s general election, has said growth is the government’s “national mission” and is hoping planning reforms will help lift an economy that has underperformed many of its peers since the pandemic.

Chancellor Rachel Reeves said after the figures were released: “This week I have already taken the urgent action necessary to fix the foundations of our economy to rebuild Britain and make every part of Britain better off. A decade of national renewal has begun, and we are just getting started.”

The weather appears to have played a big role in the UK’s economic growth over the past two months. Rainfall in April was 155 per cent of the long-term average for the month, and May was the warmest on record since records began in 1884, according to the Met Office.

Source link

Content Disclaimer and Copyright Notice
Content Disclaimer

The content provided on this website is sourced from various RSS feeds and other publicly available sources. We strive to ensure the accuracy and reliability of the information, and we always provide source links to the original content. However, we are not responsible for the content’s accuracy or any changes made to the original sources after the information is aggregated on our site.

Fair Use and Copyright Notice

This website may contain copyrighted material, the use of which has not always been specifically authorized by the copyright owner. We believe this constitutes a “fair use” of any such copyrighted material as provided for in section 107 of the US Copyright Law.

In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.

Leave a Reply

Your email address will not be published. Required fields are marked *