“Economy recovers in May with growth in all major sectors”
The UK economy rebounded in May, official data show, brushing off expectations that inflation will weigh on growth, although experts warn this good news may not last long.
In May, Gross Domestic Product increased by 0.5%, the Office for National Statistics said in a statement, at a time when analysts had forecast zero growth.
“The economy recovered in May with growth in all major sectors,” said Darren Morgan, director of the official data agency.
This strong progress was driven by the recovery in construction, manufacturing and services.
The indicator contrasts with data from April, when the economy contracted 0.2%, stoking looming recession fears.
The Bank of England’s BoE, which is the issuer, has raised interest rates five times since December in a bid to curb inflation, which is weighing on the purchasing power of British households.
Inflation hit a 40-year high in May, with prices up 9.1%, putting the indicator on track to hit double-digit levels on rising energy and food prices, the BoE warned.
The UK government is cautiously celebrating the data on Wednesday.
“It is always good to see the economy grow, but we are not complacent,” said Finance Minister Nadhim Zahawi.
“I know people are worried so we will continue to support families and economic growth,” he added.
Economists expect the economy to stagnate in May and warn that GDP could contract in June, especially due to the extra holiday due to Queen Elizabeth II’s birthday celebrations.
font type: AFP
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