UK Economy Remains on Shaky Ground

Monthly GDP fell by 0.1% in May after growth of 0.2% in April, according to the Office for National Statistics (ONS), suggesting the economy remains on shaky ground.

In the three months to May 2023, GDP has “shown no growth” when compared with the three months to February, the ONS added.

The services sector also showed no growth in the three months to May, while production grew by 0.4% and construction grew by 0.2%.

A range of manufacturing and construction businesses cited the additional bank holiday for King Charles’s Coronation as a reason for reduced output.

There was also anecdotal evidence submitted to the ONS that industrial action in May 2023 had an impact on industries to varying degrees.

Martin McTague, national chair of the Federation of Small Businesses described the fall in GDP as “unwelcome, but not a surprise”.

“Small firms have been telling us they are facing pressure from all directions, such as interest rate rises, cost inflation and an ongoing late payment culture by big corporations,” he added.

Jeremy Hunt, Chancellor of the Exchequer, said: “The best way to get growth going again and ease the pressure on families is to bring inflation down as quickly as possible.”

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