Britain's economy unexpectedly shrank for the second month in a row in May, raising pressure on the Labour government and boosting expectations for an interest rate cut in August.
The UK economy contracted by 0.1% in May following a 0.3% drop in April, according to the Office for National Statistics on 11 July.
The data surprised economists, who had forecast a slight recovery. While the services sector saw minimal growth, a fall in industrial production and construction led to an overall decline in GDP.
After a strong start to 2025, growth momentum has stalled. Analysts now suggest the April-to-June quarter may see little or no expansion.
The Bank of England, which had previously raised its annual growth forecast to 1%, may respond by cutting interest rates next month.
“The weak figures suggest an August rate cut looks increasingly inevitable,” said Suren Thiru of ICAEW, despite recent inflation concerns.
Prime Minister Keir Starmer’s Labour government is under mounting pressure to revive growth.
Finance Minister Rachel Reeves, already facing fiscal strain, may be forced to raise taxes again in the upcoming budget, though she had hoped to avoid this.
"While today's figures are disappointing, I am determined to kickstart economic growth," said Reeves on Friday.
Goods exports to the U.S., Britain’s largest trade partner, dropped sharply in April after surging earlier in the year due to fears over new tariffs. May’s export levels saw only a minor recovery, reverting to figures seen three years ago.
The Bank of England estimates that the UK economy grew by about 0.25% in Q2, but that hinges on stable data for June. If GDP shrinks by 0.4% or more, the quarter could end in contraction.
Despite recent setbacks, some economists see glimmers of hope. KPMG’s Yael Selfin noted that real wage growth and lower borrowing costs may help lift consumer spending later this year.
A 77-year-old man and a 63-year-old woman were killed on Monday (4 May), after a man drove a car into a crowd on...
At a time when geopolitical tensions continue to ripple across multiple regions, from Ukraine to the Middle East, ...
Iran warned Armerican forces on Monday (4 May) not to enter the Strait of Hormuz, after the U.S. said it...
Austria has expelled three diplomats from the Russian Embassy over concerns that satellite installations on diplomatic buildings could be used for ...
Recent developments across the Middle East show political messaging is moving beyond traditional channels, with public art and AI-generated content...
NATO’s new 5% of GDP defence pledge shows renewed unity and focus on collective security, Deputy Secretary General Radmila Shekerinska told AnewZ in an exclusive interview. It came as U.S. President Donald Trump used his WEF address to again claim credit for pushing allies to lift defence spending.
The UK economy grew more strongly than expected in November, according to official figures, offering signs of resilience after months of weak performance.
Georgia’s real gross domestic product (GDP) grew by 6.4% year-on-year in the third quarter of 2025, reaching GEL 27.9 billion, according to preliminary data released by the National Statistics Office (Geostat).
Kyrgyzstan's GDP surged 11.7% year on year in the first half of 2025, driven by gains in services, construction and production, despite a decline in external trade.
A 77-year-old man and a 63-year-old woman were killed on Monday (4 May), after a man drove a car into a crowd on a pedestrianised street in the the eastern German city of Leipzig, authorities said.
Iran warned Armerican forces on Monday (4 May) not to enter the Strait of Hormuz, after the U.S. said it had launched a mission to try and reopen the sea passage. Meanwhile, Iran's Foreign Minister said there was no military solution to the Middle East conflict.
China has moved to block U.S. sanctions on five of its oil refineries, in a fresh escalation of tensions over trade and energy policy.
U.S. President Donald Trump has said he will “soon be reviewing” a new 14-point proposal sent by Iran, casting doubt on the chances of a deal after Tehran called for security guarantees, an end to naval blockades and a halt to the war across the region, including in Lebanon.
Ukraine has launched a new wave of drone strikes on Sunday (3 May) across Russia, hitting key infrastructure and causing casualties in several regions, officials on both sides said.
A 77-year-old man and a 63-year-old woman were killed on Monday (4 May), after a man drove a car into a crowd on a pedestrianised street in the the eastern German city of Leipzig, authorities said.
Austria has expelled three diplomats from the Russian Embassy over concerns that satellite installations on diplomatic buildings could be used for espionage.
A Russian missile strike killed six people in Ukraine’s Kharkiv region on Monday (4 May), as Kyiv reported fresh attacks on energy infrastructure and a sharp rise in drone strikes on ports.
Australia and Japan agreed on Monday to deepen cooperation on energy and critical minerals, as Japan’s Prime Minister Sanae Takaichi met her Australian counterpart Anthony Albanese during a three-day visit.
Australia began public hearings on Monday in an inquiry into the Bondi Beach mass shooting in December, with Jewish Australians giving evidence about their experiences of rising domestic antisemitism.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment