The UK economy shrank for the second consecutive month in May, in an early setback for new Chancellor Rachel Reeves and a sign that the fragile recovery may be stalling.
According to figures released this morning by the Office for National Statistics (ONS), GDP contracted by 0.1% in May, falling short of analysts’ expectations for a modest rebound. This follows a sharper 0.3% drop in April and marks the second month of decline after a brief bounce of 0.4% in March.
The ONS said the decline in May was driven primarily by a 0.9% fall in industrial production and a 0.6% drop in construction output, although the dominant services sector managed slight growth of 0.1%.
The ONS noted:
- Services output grew by 0.1% in May, following a 0.3% decline in April.
- Production output – covering manufacturing and energy – dropped 0.9%, after falling 0.6% in April.
- Construction output declined 0.6% in May, reversing gains made in April.
While all three sectors showed growth over the three months to May – led by a 1.2% rise in construction – the month-on-month picture paints a more concerning image of an economy struggling to build momentum.
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