Following a dreary set of results in April where the economy stagnated, the monthly GDP is estimated to have grown by 0.4%, according to data from the Office for National Statistics (ONS).
In the three months leading to May, it was estimated that real GDP grew by 0.9% compared with the previous three months leading up to February.
This was in great part due to the services output, which rose by 1.1% in the same three-month period – the largest boost in that sector since December 2021.
Within that time frame, professional, scientific and technical activities represented the biggest growth, rising by 2.5% in the three months to May 2024.
Based on monthly activity, the repair of motor vehicles and motorcycles was the largest contributor to the improved figures in services output for May.
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However, while there were plenty of green shots following the short recession earlier this year, construction output fell by 0.7% in that same period, while construction growth flattened.
Following the first economic results under the Labour Government, Chancellor Rachel Reeves said: “Delivering economic growth is our national mission, and we don’t have a minute to waste.
“That is why, this week, I have already taken the urgent action necessary to fix the foundations of our economy to rebuild Britain and make every part of Britain better off. A decade of national renewal has begun, and we are just getting started.”
‘Unlikely to see significant change’
Meanwhile, Lindsay James, investment strategist at Quilter Investors, believes that whatever plans the new leadership has in mind, it might be a while until significant improvements to GDP growth are seen.
James said: “Regardless of the new Labour Government’s agenda, the second half of 2024 is unlikely to see a significant change of pace compared to the first, and we may not see any noticeable difference until next year.
“Labour’s first fiscal statement, which is expected no earlier than mid-September, should make both taxation and spending plans clearer.
“This will allow businesses to better plan ahead and could in turn reinvigorate their want to invest. However, this would take time to feed through, and until there is a better understanding of what is to come, we are unlikely to see any meaningful acceleration in GDP growth.”
