UK Economy Grew 0.1 Percent in May, Official Figures Show

The UK economy grew by 0.1 percent in May, official figures showed on July 16.The minimal bump in gross domestic product (GDP) reversed a drop by the same amount in April, as services output rose by 0.3 percent on the month while industrial production and construction slipped by 0.5 percent and 0.8 percent, respectively, according to figures from the UK Office for National Statistics (ONS).“Real gross domestic product (GDP) is estimated to have grown by 0.7 percent in the three months to May 2026, compared with the three months to February 2026,” the ONS said, adding that it represents “the sixth consecutive three-month on three-month growth and follows a growth of 0.8 percent in the three months to April (revised up from a growth of 0.7 percent in our previous publication), and a growth of 0.6 percent (unrevised from our previous publication) in the three months to March 2026.”The growth in services over the three months to May was driven by computer programming and advertising, alongside the pharmaceutical industry, the ONS said, adding that growth in research and development in medical sciences was particularly strong.The figures will make pleasant reading for British Chancellor of the Exchequer Rachel Reeves, amid widespread speculation that she will vacate the role after Andy Burnham replaces outgoing Prime Minister Keir Starmer next week.Burnham, the former mayor of Manchester, received an unassailable number of nominations from Labour members of parliament for the role of party leader this week and is set to be formally named leader on July 17, before officially taking over as prime minister on July 20.After assuming office, Burnham will be entitled to select his own cabinet, meaning he could relieve Reeves of her post.However, despite a minor boost to GDP, the UK’s economic outlook remains mired in uncertainty amid energy cost spikes driven by the war between the United States and Iran and political uncertainty at home.When Burnham takes the reins at 10 Downing Street, he will become the seventh British prime minister in the past 10 years.The Organisation for Economic Co-operation and Development (OECD), on July 15, said in a report it expected British GDP to grow by only 0.9 percent this year and 1.1 percent in 2027, although the forecast for 2026 was the strongest for the major European economies.The Paris-based organization of 38 market economies urged the UK to keep the budget disciplined, tackle high pension spending, and address skyrocketing energy prices to speed up growth.OECD Director of Economics Policy and Research Asa Johansson said when launching the report that the challenge for the UK “is to drive faster productivity growth and higher living standards while preserving sound public finances.”“Delivering the government’s ambitious reform agenda, while rebuilding fiscal buffers and investing in people, energy and regions, can help secure stronger and more sustainable growth over the long term,” he added.The OECD urged the UK government to reallocate “spending towards productivity-enhancing public investment, together with improving the efficiency of the tax system and reducing inefficient tax expenditures, would help rebuild fiscal buffers and support long-term growth,” in a press release accompanying the report.As part of this, it advised that the state pension should be reindexed in the medium term, which the body said would help “preserve fiscal sustainability while maintaining pension adequacy.”The OECD further called for “strengthening work incentives and expanding private pension savings, particularly for groups with low retirement savings, like the self-employed,” and said the government should aim to reduce “regional productivity disparities.”It also stated that the UK should “focus on strengthening energy security while ensuring households and businesses benefit from lower and more stable energy costs.”