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Economic Development

May Sees º£½ÇÊÓÆµ economic growth exceed expectations, boosted by retail and construction sectors

The economy grew by 0.4% in May, according to official data, with the high street and construction sector showing signs of recovery following a tough few months

A crowd of shoppers walk past shops in the street(Image: PA Archive/PA Images)

The º£½ÇÊÓÆµ economy saw stronger-than-anticipated growth in May as shoppers returned to high streets and construction work bounced back, according to official data from the Office for National Statistics (ONS). The ONS reported that gross domestic product (GDP) rose by 0.4% in May, following a period of stagnation in April when consumer spending was impacted by unfavourable weather conditions.

Economists had initially projected a 0.2% increase in GDP for May. Liz McKeown, ONS director of economic statistics, commented: "The economy grew strongly in May, with all the main sectors seeing increases."

She added: "Many retailers and wholesalers had a good month, with both bouncing back from a weak April."

McKeown also noted that "Construction grew at its fastest rate in almost a year after recent weakness, with housebuilding and infrastructure projects boosting the industry."

A graph showing º£½ÇÊÓÆµ monthly economic growth (GDP) since May 2023. Source: ONS(Image: PA Graphics/Press Association Images)

The services sector continued to be a primary driver of economic growth across the º£½ÇÊÓÆµ, according to the ONS, experiencing its fifth consecutive month of growth.

Retailers enjoyed a particularly successful month, with trade increasing by 2.9% in May, recovering from a 1.8% decline the previous month, which had been attributed to poor weather. Accommodation and food services, encompassing hotels and restaurants, also demonstrated strong performance, achieving 2.4% growth.

In other areas, the construction industry witnessed a 1.9% increase in output, with growth observed in both new work and maintenance. Despite this positive rebound, the sector experienced an overall contraction over the three months leading up to May, as it grapples with the ongoing challenges posed by high interest rates.

Rachel Reeves (Image: PA Wire/PA Images)

The º£½ÇÊÓÆµ's economy unexpectedly picked up the pace in May, bolstering prospects of outperforming the Bank of England's forecast of 0.5% growth for Q2, unless June faces a considerable downturn.