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Britain’s economy shrank slightly in May with GDP pulled down by a sharp drop in production output led by a 2% fall in electricity, gas, steam and air condition supply, according to the country’s main statistical agency. File Photo by Neil Hall/EPA-EFE
July 13 (UPI) — Britain’s economy contracted in May after growing slightly in April largely due to a decline in production output and fewer working days in the month due to the Coronation of King Charles III, according to official estimates published Thursday.
Monthly gross domestic product reversed from a 0.2% rise in April to -0.1% in May pulled down by a sharp decline in electricity and gas production contributing to a deepening downturn in production output which fell 0.6%, compared with a 0.2% drop in April, the Office for National Statistics said in its May bulletin.
Growth was also hit by a fall in construction and services which ground to a halt after racking up 0.3% growth in April, mainly due to consumer-facing services growth turning negative.
The economy was 0.4% smaller than in May 2022, showed zero growth in the three months to May, and remains roughly the same size as it was pre-COVID-19 in Feb. 2020.
“GDP fell slightly as manufacturing, energy generation and construction all fell back with some industries impacted by one fewer working day than normal. Meanwhile, despite the Coronation Bank Holiday, pubs and bars saw sales fall after a strong April. Employment agencies also saw a poor month,” ONS Economic Statistics Director Darren Morgan said in a Twitter post.
Opposition Labor’s shadow chancellor Rachel Reeves criticized the economy’s lackluster performance in a Twitter post.
“The Tories seem determined to march us down a path of low growth and economic insecurity. Labor will build a stronger economy so that working people get the future they deserve,” Reeves said.
The latest indication that all is not well with the economy comes two days after the latest wages data showed the pay of British workers is rising at a record 7.3% adding to fears the central bank will depress growth further by raising interest rates — currently standing at 5% — for a 14th consecutive time when it meets next month
The ONS said last month that the annual Consumer Price Index remained persistently high, up by 8.7% in the 12 months to May, but critical core inflation — which strips out volatile energy, food, alcohol and tobacco prices — jumped by 0.3% to 7.1%, its highest level in 31 years.
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