UK economy growth slower than expected in May

GDP is now 3.1% below where it was in February 2020, before the pandemic struck

The 0.8 per cent expansion in May followed growth of 2 per cent the month before, which was revised down

The 0.8 per cent expansion in May followed growth of 2 per cent the month before, which was revised down

 

The UK economy grew less than expected as the relaxation of lockdown curbs extended to restaurants, hotels and cinemas.

The 0.8 per cent expansion in May followed growth of 2 per cent the month before, which was revised down, the Office for National Statistics said Friday. It reflected small declines in construction and manufacturing output, both of which were expected to continue rapid expansion.

Gross domestic product is now 3.1 per cent below where it was in February 2020, before the pandemic struck. The Bank of England predicts a full return by the end of the year. The boom is creating price pressures and fueling speculation about when the central bank could rein in its stimulus programme.

However, risks to the outlook abound. Job support programs are being wound down, and prime minister Boris Johnson plans to lift all remaining restrictions on July 19th, despite the delta variant of coronavirus driving a fresh wave of infections. The worry is that doing so when millions of people are not fully immunised could backfire and force the government to re-impose restrictions.

Trade statistics that were due to be published alongside GDP were delayed until later Friday due to technical issues, the ONS said.

- Bloomberg