London, United Kingdom. Britain’s economy grew by 0.1% in May after contracting by 0.1% in April, as an expansion in services output offset declines in industrial production and construction, official data showed on Thursday.
The figures came amid concerns over business confidence linked to the Iran war and an expected change of prime minister.
Monthly output
Gross domestic product growth in May matched the median forecast in a Reuters poll of economists. Services output increased by 0.3% from the previous month.
Industrial production fell by 0.5%, while construction output declined by 0.8%.
Three-month growth
The economy expanded by 0.7% in the three months to May, providing a positive backdrop for finance minister Rachel Reeves before her expected replacement next week under incoming prime minister Andy Burnham.
News reports on Wednesday, including the Financial Times, said Shabana Mahmood, currently Britain’s interior minister, was expected to be named finance minister by Burnham.
Annual comparison and outlook
Growth in the three months to April was revised up to 0.8%, the fastest expansion since the Labour Party came to power and matching the rate recorded under Reeves’ Conservative predecessor Jeremy Hunt in May 2024.
Output in May was 1.3% higher than a year earlier, marking the largest annual increase in 10 months.
The outlook remains affected by the conflict in the Gulf and uncertainty surrounding Britain’s seventh change of political leadership in 10 years. The Organisation for Economic Co-operation and Development said on Wednesday that it expected British GDP to grow by 0.9% this year and 1.1% in 2027, while forecasting that 2026 growth would be the strongest among major European economies.
