July 11 (Reuters) – The British economy showed an unexpected contract for the second consecutive month in May, official data on Friday, which increased the concerns of Finance Minister Rachel Reeves, while the country faces the growing global turmoil.
The National Office for National Statistics said that the GDP cried 0.1 % after a decrease of 0.3 % in April.
Economists of Reuters mostly expected that GDP (GDP) would increase 0.1 % compared to April. Although the services sector has recorded small growth, the decrease in industrial and construction production presses public production.
After a sudden increase in growth earlier this year, the British economy can now face stable or weaker growth than expected from April to June.
Friday's data now increases the expectations that the Bank of England will reduce interest rates next month.
“The lack of momentum in the British economy that these slow figures referred to means that reducing the interest rate in August seems to be inevitable despite the recent increase in inflation,” said Surin Thiro, Director of the ICAEW accounting agency economics.
The government of the Labor Party in Prime Minister Kiir Starmer faces difficulty in improving growth in its first year, while increasing taxes on US President Donald Trump and commercial wars, which weighs such.
The export of Britain's products to the largest destination of exporting the United States earlier this year, as American importers rushed to avoid the imposition of Trump's tariff.
But they fell sharply in April. The commercial data published on Friday showed only a simple recovery to about 4.4 billion pounds in May, which brought export levels to levels about three years ago.
Economists say it seems likely that Reeves will need to increase taxes again in his next budget – something you expected to avoid.
“Although today's numbers are disappointing, I am determined to enhance economic growth,” Reeves said in Friday's data.
The British economy grew quickly in the first quarter of 2025, exceeding the growth of other G7 G7 Group. In May, the Bank of England reviewed the annual growth forecast to 1 %.
However, a lot of growth is likely to be linked at the beginning of 2025 to the end of the tax exemption for some real estate purchases in April, which strengthened the sector before the deadline, as well as the prisoner of manufacturers to overcome the highest import rates of the United States.
The Bank of England said it believed that the economy grew about 0.25 % in the second quarter of 2025.
After the Mayo numbers released on Friday, June's monthly data will need to show at least one stable reading, assuming that there are no reviews in the previous months, so that it is possible to obtain some growth in the quarter.
The monthly contraction of 0.4 % or worse in June will announce a quarterly shrinkage.
“The second decrease in a row in the real monthly GDP in May will increase concerns that the government growth plan was damaged by external and home shocks,” said Raj Badiani, the European Economic Director at the S& P Global Markt Intelligence.
Yael Silvin, the chief economist in KPMG UK, said he expected the economy to remain stable in the second quarter, but family spending may now increase.
She said: “With the growth of salaries over the costs of inflation and the costs of loan and must decrease more, the date of the modest recovery may be determined in consumer spending for the second half of the year.”
($ 1 = 0.7386 pounds)
Charlotte Whitmore is a contributor at Mediarunsearch.co.uk, covering a broad range of topics including news, politics, business, technology, sport, entertainment, and lifestyle. She focuses on delivering clear, balanced reporting and practical information that helps readers stay informed about current events and emerging developments. Her work highlights stories that matter to everyday audiences, with an emphasis on accuracy, relevance, and accessible journalism that keeps readers connected to the issues shaping the UK and beyond.