The UK economy unexpectedly shrank by 0.1% in May for a second month, driven by declines in manufacturing and weak retail sales. Chancellor Rachel Reeves expressed disappointment, emphasizing the government’s commitment to spur growth. Despite the contraction, the economy grew 0.5% from March to May, helped by exports and pre-stamp duty tax break home purchases. The services sector saw growth, particularly in legal firms. Analysts noted the ongoing challenges for the economy, stressing the fragile growth outlook amid scaled-back business hiring and weakened public finances.
The UK economy shrank unexpectedly in May, contracting for the second month in a row, with a decline of 0.1% driven by a drop in manufacturing.
The services sector grew overall in May, with legal firms recovering from the impact of changes to stamp duty thresholds the previous month.
Despite the contraction in May, the economy grew 0.5% in the March-to-May period, indicating a fragile outlook for continued growth.
Ben Jones stated that the weak figure for May highlights ongoing pressures on the UK economy with manufacturing and retail struggling.
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