UK economy recovers in May, boosting Labour government expectations

(MENAFN) The UK Economy demonstrated a robust recovery in May, providing an early positive signal for the newly elected Labour government as it focuses on revitalizing the country's economic prospects. According to data from the Office for National Statistics released on Thursday, Britain's gross domestic product (GDP) expanded by a stronger-than-expected 0.4 percent month-on-month in May, following a period of stagnation in April.

The May figures highlight a notable turnaround, driven largely by a resurgence in the construction sector, which experienced its fastest growth in nearly a year. This growth trajectory positions the UK on course for another robust quarter of economic expansion as it continues to rebound from the recessionary pressures of recent years.

The weather played a significant role in May's economic performance, with improved conditions following heavy rains in April that had dampened retail and construction activities. Warmer weather in May, marking the country's sunniest on record according to the UK Met Office, contributed to increased retail sales and boosted construction activity. Liz McKeown, Director of Economic Statistics at the ONS, noted that many retailers and wholesalers rebounded strongly from a sluggish April, while the construction sector benefited from accelerated growth driven by housebuilding and infrastructure projects.

On a broader scale, the UK economy emerged from the recession that had been triggered by interest rate hikes in the latter half of 2023, as the Bank of England halted its rate increases aimed at curbing inflation by moderating demand. Despite expectations of potential interest rate cuts in 2024, economic indicators such as service sector price rises and escalating wages have posed persistent challenges.

With economic growth topping its agenda, the new Labour government has initiated several pro-growth policies, including the establishment of a National Wealth Fund. These efforts underscore a proactive approach aimed at sustaining and accelerating the UK's recovery trajectory amid ongoing economic uncertainties.



Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.