UK economy returns to growth in May

The UK economy grew quicker than expected in May 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.”

Luke Bartholomew, deputy chief economist at abrdn, commented: “While it is important to stress that the monthly GDP series is very volatile, the strength of today’s report is consistent with the broader evidence of the UK continuing its solid recovery from a long period of stagnation.

“With the Bank of England’s chief economist Huw Pill sounding somewhat cautious about the outlook for inflation, the fact that the economy now looks set to grow faster than the bank’s forecasts may also make investors slightly more nervous about the prospect for an August rate cut.

“However, as long as the inflation data cooperate, we continue to expect the first cut next month.”

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