UK Economy Surges 0.4% in May, Exceeds Forecasts

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Britain’s economic output experienced a notable rise of 0.4% in May, surpassing expectations and bolstered by a significant upswing in housing construction, according to official data recently released. This development comes as a positive sign for the newly inaugurated government led by Prime Minister Keir Starmer.

A survey conducted by Reuters among economists had predicted a modest 0.2% increase in the monthly gross domestic product for May. Contrary to these projections, the data from the Office for National Statistics displayed a more robust growth performance.

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The details revealed a widespread enhancement in economic output across various sectors, with services, manufacturing, and construction industries all reporting growth. The construction sector showed a particularly strong performance with a 1.9% rise for the month, heavily influenced by the housing market’s activity.

In the broader context, the economy expanded by 0.9% over the three months leading up to May, marking the strongest growth rate since the three-month period concluding in January 2022. This figure exceeded the consensus forecast of a 0.7% expansion.

Recently, the Bank of England had projected a 0.5% economic growth for the second quarter, a forecast that appears increasingly achievable given the latest data.

ONS Director of Economic Statistics, Liz McKeown, highlighted the overall strong performance of the economy in May, with all principal sectors observing growth. She noted, “Many retailers and wholesalers had a good month, with both bouncing back from a weak April.”