The king’s coronation weighs on the UK economy as production falls 0.1% in May. Photo: Maureen McLean/Alamy Live News
The risk of a recession this year continues to loom over the UK economy as UK GDP contracted slightly in May.
Figures from the Office for National Statistics (ONS) showed negative growth of 0.1% for the month. The UK economy showed no growth in the three months to May 2023.
The additional holiday for the king’s coronation meant that GDP was generally expected to fall.
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The ONS reports that manufacturing output fell 0.6% in May while the construction sector fell 0.2%.
The services sector showed no growth in May, while consumer-facing services fell 0.2% over the month.
The fall in May means the UK’s monthly GDP is now estimated to be just 0.2% above the pre-coronavirus level set in February 2020.
Chancellor Jeremy Hunt said: “While an extra bank holiday in May weighed on growth, high inflation remains a drag on economic growth.
“The best way to restart growth and ease the pressure on families is to bring inflation down as soon as possible. Our plan will work, but we have to stick to it.”
There are concerns over the risk of a UK recession as record wage increases put pressure on the Bank of England to raise interest rates for longer.
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Darren Morgan, director of economic statistics at the ONS, said: “GDP fell slightly as manufacturing, power generation and construction fell and some sectors were impacted by a less than normal working day.”
“Meanwhile, despite the Corona holiday, pubs and bars saw sales fall after a strong April. Employment agencies also had another bad month.”
“However, overall services were flat, the healthcare sector recovered, the impact of the strikes was less than the previous month and the IT industry also had a strong month.”
“In the last three months, the economy as a whole showed no growth.”
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