UK economy grew 0.1% in May despite Iran war impact, ONS reports
6 reported
The UK economy returned to growth in May, with GDP rising 0.1% according to the Office for National Statistics, despite the impact of the Iran war on energy costs. This followed a 0.1% decline in April, and the economy appeared more resilient than some analysts had feared. Services output increased 0.3% over the month, but was partly offset by a 0.5% decline in production and a 0.8% fall in construction. The strongest contributor to monthly output was scientific research and development, which rose 5.1%. Over the three months to May, GDP growth was 0.7%, a modest slowdown from 0.8% in the three months to April. Analysts noted that GDP still looks likely to be stagnant over the second full quarter of the year, with the Iran conflict suppressing activity in key sectors. The International Monetary Fund recently upgraded its forecast for UK GDP growth for the year to 1%, up 0.2 percentage points from its April forecast.
What’s reported
UK GDP rose 0.1% in May, after a 0.1% decline in April.
Services output was up 0.3%, production down 0.5%, construction down 0.8%.
Scientific research and development was the strongest contributor, up 5.1%.
Over three months to May, GDP growth was 0.7%, down from 0.8% in the three months to April.
The IMF upgraded its UK GDP growth forecast for the year to 1%.
The Resolution Foundation estimates more than half of the £23.6bn in fiscal headroom will be wiped out by the war's effects.
Key figures
Rachel Reeves, chancellor expected to depart on Monday
Andy Burnham, prime minister-in-waiting
Liz McKeown, ONS director of economic statistics
Suren Thiru, chief economist of the ICAEW
Stuart Morrison, research manager at the British Chambers of Commerce
Shabana Mahmood, expected to replace Reeves
A Treasury spokesperson (not named)
Sources: The Guardian
