The UK economy returned to growth in May after a slowing April, resuming its recovery from last year’s recession.
Britain’s gross domestic product (GDP) grew 0.4% month-on-month, after registering zero growth in April when wet weather hit consumer spending, according to figures from the Office for National Statistics (ONS). City economists had expected growth of 0.2%.
In the first week after Labour’s landslide election victory, Chancellor of the Exchequer Rachel Reeves promised to reboot the economy, making it the new government’s “national mission” to ensure the fastest sustained growth in the G7.
Keir Starmer, the first Labour leader to take power from opposition since Tony Blair in 1997, takes office as the economy gradually recovers from a short, shallow recession late last year when households cut back on spending amid a cost-of-living crisis.
Economic growth picked up in the first quarter of the year, with the economy expanding 0.7%, but growth leveled off in April, the first month of the second quarter, as rainy weather discouraged consumers from shopping in busy areas.
After a long period of rising prices, inflation is set to return to the government’s 2% target, reaching a peak of 11.1% in October 2022, the highest level in 41 years.
As inflation falls, the Bank of England is expected to start cutting interest rates as early as next month, offering relief and hope to households facing sharp increases in mortgage costs.
