UK economy returned to growth in May
The growth was better than many experts predicted and an improvement on the figures from April when the economy contracted by 0.4 per cent due to car plants shutting down ahead of the original Brexit deadline of 29 March.
Rob Kent-Smith, head of GDP at the ONS, said: “GDP grew moderately in the latest three months, with IT, communications and retail showing strength. Despite this, there has been a longer-term slowdown in the often-dominant services sector since summer 2018.
“The economy returned to growth in the month of May, following the fall seen in April. This was mainly due to the partial recovery in car production.”
Output in the dominant services sector was stagnant in May, following a tick-up of 0.1 per cent in April. There was better news in construction where output increased by 0.6 per cent after previous falls.
However, there are still signs that the UK could face a significant Q2 slowdown
Ben Brettell, senior economist at Hargreaves Lansdown, said: “Storm clouds look to be gathering over the UK economy as consumers and business remain hamstrung by Brexit uncertainty. For example yesterday the British Retail Consortium’s report showed average sales growth weakened to 0.6 per cent in the 12 months to June, which is the slowest increase since it began calculating growth in 1995.
“The Bank of England has forecast zero growth for the second quarter (April to June). More worryingly, PMI data releases last week covering the manufacturing, construction and services sectors suggested the economy could actually have shrunk in Q2.”