UK Economy Shrinks in May, Defiant to Recovery Expectations

The UK economy contracted again in May, dealing a fresh blow to the government’s efforts to revive growth and reduce the budget deficit.

According to the latest Office for National Statistics data, UK GDP shrank by 0.1% month-on-month in May, compared to analysts’ expectations for a similar growth, according to Reuters.

The economic weakness was concentrated in industrial production, which fell by 0.9%, and the construction sector, which declined by 0.6%. These figures are disappointing for Chancellor Rachel Reeves, who has made stimulating growth and reducing the fiscal deficit key priorities in her program.

This decline follows a 0.3% contraction in April, coinciding with a rise in domestic taxes in Britain and US President Donald Trump’s announcement of tariffs on trading partners and economic allies, which led to widespread disruptions in global markets and increased uncertainty for businesses.