UK economy returned to growth in May, figures show

The UK economy grew quicker than expected in May following a washout month in April as more shoppers returned to high streets and construction work recovered.

The Office for National Statistics (ONS) said gross domestic product (GDP) increased by 0.4% in May.

It came after no growth was recorded in April when damp weather hit consumer spending.

Economists had predicted that GDP would increase by 0.2% in May.

ONS director of economic statistics Liz McKeown said: “The economy grew strongly in May, with all the main sectors seeing increases.

“Many retailers and wholesalers had a good month, with both bouncing back from a weak April.

“Construction grew at its fastest rate in almost a year after recent weakness, with housebuilding and infrastructure projects boosting the industry.”

The services sector remained a key driver for economic growth across the UK, the ONS said, with its fifth consecutive monthly increase.

Retailers had a particularly strong month, reporting a 2.9% increase in trade for May as they rebounded from a 1.8% decline the previous month in the face of poor weather.

Accommodation and food services, which includes hotels and restaurants, was another strong performer, with 2.4% growth.

Elsewhere, the construction industry saw output grow by 1.9%, with an increase in both new work and maintenance.

Despite the rebound, the sector still contracted over the three months to May as it continues to face pressure from high interest rates.

The stronger-than-expected performance in May puts the country’s economy on track to surpass the Bank of England’s projection of 0.5% growth for the second quarter, barring a notable decline in June.

It would represent an early boost for the new government, which is looking for economic growth and thus higher tax revenues to help fund its spending plans.

Chancellor Rachel Reeves said: “Delivering economic growth is our national mission, and we don’t have a minute to waste.

“That is why 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."

Shadow Chief Secretary to the Treasury Laura Trott said: “Today’s figures show that the steps we put in place whilst in government have strengthened the economy.

“These figures also prove Labour are inheriting an economy turning a corner, after the many difficult decisions we took in government."

The figures come after a 0.6% increase in the first quarter of 2024, having rebounded from a shallow recession in the latter half of 2023.

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