The UK economy saw a notable uptick in May, driven largely by an increase in high street shopping, according to official statistics from the Office for National Statistics (ONS). Gross domestic product (GDP) grew by 0.4 percent, outpacing economists’ expectations of a 0.2 percent rise. This growth marks a recovery from the stagnation experienced in April, which was attributed to damp weather affecting consumer spending.
Liz McKeown, the ONS’s director of economic statistics, highlighted that all major sectors experienced growth in May. Retailers and wholesalers bounced back from a weak April, while the construction sector grew at its fastest rate in almost a year, fueled by housebuilding and infrastructure projects.
Chancellor Rachel Reeves responded positively to the news, emphasizing the government’s commitment to driving economic growth. Following Labour’s recent landslide victory in the general election, the government has introduced measures aimed at boosting the economy. These measures include reintroducing housebuilding targets, reforming the planning system to lift the ban on onshore wind farms, and establishing a National Wealth Fund to attract investment.
Reeves stated, “Delivering economic growth is our national mission, and we don’t have a minute to waste.” She underscored the importance of taking immediate action to rebuild the economy and improve living standards across the country. She also noted that if the UK had matched the average growth rate of OECD economies since 2010, the economy would be £143.3 billion larger, equivalent to £5,053 per household.
In a promising development, inflation has returned to the government’s target of 2 percent after peaking at 11.1 percent in October 2022, the highest level in 41 years. With inflation decreasing, the Bank of England is expected to begin reducing interest rates, potentially as early as August, which would provide relief to households facing high mortgage costs.
This economic recovery signals a positive shift, with the government’s new measures set to foster further growth and stability in the coming years.
