- Saturday, May 04, 2024
GDP decreased by 0.1 per cent in May
By: Pramod Thomas
THE UK economy shrank slightly in May, hit partly by an extra public holiday for the coronation of King Charles III, official data showed Thursday (13).
Gross domestic product decreased by 0.1 per cent in May, the Office for National Statistics said in a statement.
That beat expectations for a contraction of 0.3 per cent and followed a 0.2-per cent rise in April.
Output slid as businesses downed tools for the extra bank holiday to celebrate the royal event.
“GDP fell slightly as manufacturing, energy generation and construction all fell back with some industries impacted by one fewer working day than normal,” said ONS economic statistics director Darren Morgan.
“Meanwhile, despite the coronation bank holiday, pubs and bars saw sales fall after a strong April.
“However, services were flat overall with health recovering, with less impact from strikes than in the previous month, and IT also had a strong month.”
Activity remains under strain from the cost-of-living crisis, sparked by stubbornly high inflation, and rising interest rates.
“While an extra bank holiday had an impact on growth in May, high inflation remains a drag anchor on economic growth,” noted finance minister Jeremy Hunt in reaction to the data.
“The best way to get growth going again and ease the pressure on families is to bring inflation down as quickly as possible.”
There was zero economic growth in the three months to May, compared with the three months to February, the ONS added.
But the economy was 0.2 per cent larger than its pre-pandemic level.
“May’s GDP figures demonstrate that the economy remains listless and that the recovery signalled by many of the business surveys… has not taken hold yet,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
“Looking ahead, we continue to think that the economy will regain a little momentum in the second half of this year, led by a pick-up in households’ real expenditure.”
The Bank of England has ramped up interest rates 13 times in a row to the current level of five percent in an attempt to dampen stubbornly-high consumer prices.
UK annual inflation unexpectedly held at 8.7 percent in May, causing the central bank to hike by a larger-than-expected amount.
June inflation data is slated for publication next Wednesday (19).
(AFP)
