- Economy contracted by 0.1% in May
- Production output fell 0.6% as an extra bank holiday pulled people out of workplaces
- Despite Coronation celebrations there was no boost for the service sector
Danni Hewson, AJ Bell head of financial analysis, comments on UK GDP figures:
“It could have been much worse. Those three lovely, long bank holidays might have been a delight for many of us, but we knew it would come at the expense of economic growth.
“Factories, GP surgeries and schools all shut up shop as the country celebrated the Coronation of King Charles with an extra day off, which delivered a feel-good boost but curtailed sectors from manufacturing to services.
“The fact the contraction came in at just 0.1% demonstrates the resilience of the UK economy which has been battered by inflation, interest rate hikes and strike action.
“But there’s no point looking at the picture through rose-tinted glasses because it’s crystal clear that resilient is a far cry from robust.
“Over the three months to the end of May the country’s economic engine stalled, held fast by the sticky embrace of an ongoing cost of living crisis.
“If the only way to stamp out inflation is to force a recession the economy seems ready to capitulate.
“People are growing increasingly weary of inflation, and the additional pressure of increased mortgage payments will push some families right to the brink.
“Industrial action, brought about because workers are seeing their lifestyles eroded day by day, is adding to the toxic mix, and whilst May’s economic weakness must be viewed as an anomaly, productivity overall is subdued.
“Today’s figures are unlikely to sway Bank of England rate setters, though markets are increasingly split on how big August’s hike will be.”
