UK economy shows surprisingly strong growth in May


The UK economy posted surprisingly strong growth in May, with the three main components of output – manufacturing, construction and services – all posting gains.

LONDON — The UK economy posted surprisingly strong growth in May, with the three main components of output – manufacturing, construction and services – all posting gains.

The Office for National Statistics said on Wednesday that gross domestic product rose 0.5% in the month, against economic forecasts of around 0.1%. GDP fell 0.2% in April.

But the Confederation of British Industry has warned that the numbers can be volatile. May’s data was skewed by celebrations marking Queen Elizabeth II’s 70 years on the throne, including an additional bank holiday.

“This noise will continue to obscure the true state of the economy over the coming months,” CBI chief economist Ben Jones said in a statement. “In reality, CBI surveys and real-time data point to subdued economic momentum.”

Britain’s sluggish economic growth has become a central issue in the competition to become the country’s next prime minister, with all candidates pledging to cut taxes to boost investment by business owners. Eight candidates are in the running to replace Prime Minister Boris Johnson, who announced his resignation last week following a series of scandals that undermined his credibility.

In a sign of the headwinds facing the economy, the statistics office said output at consumer-focused firms fell 0.1% in May as rising prices weighed on household budgets. The Consumer Price Index rose 9.1% in May, the biggest jump in 40 years.

Overall, the services sector rose 0.4% during the month, the statistics office said. The increase was driven by healthcare as people made more appointments with GPs following the easing of COVID-19 restrictions.

Services account for around 80% of the UK’s economic output.

Production by manufacturers and other production industries rose 0.9% in May, and construction jumped 1.5%.

ABC News

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