Sunday, July 21, 2024

UK economy returns to growth

The UK economy returned to growth in May, following a flat April, according to new figures from the Office for National Statistics (ONS).

GDP (gross domestic product), a key measure of economy growth, showed a 0.4% month-on-month uptick in May, ahead of expectations.

All three main sectors contributed positively, with services output growing 0.3% in May, production output growing by 0.2%, and construction output growing 1.9%.

Ben Jones, CBI Lead Economist, said: “The latest data shows that the UK’s economic recovery is starting to put down roots. While growth in May was driven by a rebound in sectors such as retail and construction, which were hit by poor weather earlier in the spring, recent months have seen activity creeping up across a wide range of sectors.

“The new Labour government will benefit from some economic tailwinds going forward, with consumer confidence rising as lower inflation and strong wage gains support household incomes. However, many firms remain cautious about the near-term outlook. While the outcome of the election will help dispel some of the recent uncertainty, it could take a turning of the interest rate cycle for the recovery to really bed in.

“The new government’s focus on making growth a priority is welcome. However, to put the economy on a pathway to long-term, sustainable growth, we need to see concrete actions to deliver that vision within the next 100 days.

“While recent commitments to reforming the planning system are hugely welcome, firms are also keen to see progress in other key areas. A Net Zero Investment Plan would support ambitions to boost green growth, and a clear business tax roadmap would help deliver the stability that firms are looking for.”

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