- UK GDP grew 0.4% in May and achieved 0.9% growth in the three months to May 2024 compared with the same period last year
- All sectors delivered growth including construction up 1.9% in May, but it was still down 0.7% over three months
- Service sector the biggest contributor as consumers splashed out in bars and restaurants, also boosting brewers
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK GDP figures:
“It’s amazing what a bit of warm weather can do. As temperatures soared to record highs for the month of May, shoppers shopped, builders built and lots of us downed a nice cold pint.
“The new chancellor must be wondering if there’s anything the government can do to mandate a long, hot, dry summer every year, but absent some technological trickery, Rachel Reeves will have to rely on other measures to keep the country’s economic engine purring.
“July is already looking a bit soggy and even if England can bring the Euros home, boosting pub profits along the way, the wet weather is likely to impact footfall our high streets and productivity on our construction sites.
“Consumer confidence has been given a shot in the arm by falling inflation but those few extra pennies in our pay packets don’t stretch that far and there’s every indication that come the winter energy bills are going to take a bigger bite out of our household budgets.
“May’s growth, which came in above expectation, is cause for cautious celebration and looking over three months the pace of growth was the fastest since January 2022 when the spectre of the Omicron Covid variant was receding.
“Though it’s important not to put too much weight on one set of figures. Market expectation of an August interest rate cut has fallen back to 50/50 after a number of cautious comments from policy makers. And 0.4% growth is still sluggish. But with fresh eyes looking under the bonnet, there is hope the mechanics can be overhauled.”
