Britain’s economy recorded modest growth in May, expanding by 0.1 per cent after contracting in April, according to new figures released on Thursday by the Office for National Statistics (ONS).
The improvement was largely driven by stronger activity in the country’s services sector and comes just days before Andy Burnham is due to assume office as the United Kingdom’s new prime minister.
Official figures showed that the UK economy had shrunk by 0.1 per cent in April as inflationary pressures intensified following the outbreak of the US-Iran war, which caused global oil prices to surge.
Higher energy costs contributed to increased inflation and weighed on economic activity during the month.
However, economic performance improved in May as the services industry posted stronger output.
“The growth in May was because of a rise of 0.3-percent (output) in services,” the Office for National Statistics said in a statement.
The latest economic figures arrive at a politically significant moment, with Andy Burnham expected to replace Keir Starmer as prime minister on Monday.
Starmer stepped down as both prime minister and Labour Party leader last month after months of mounting pressure within the governing party.
His resignation followed a series of political controversies, criticism over the government’s handling of the economy and several policy reversals that weakened his position.
Economic analysts said the latest GDP figures provide a positive backdrop for the incoming administration.
Paul Dales, Chief UK Economist at Capital Economics, described the figures as encouraging for Burnham as he prepares to take office.
“The latest data ‘is not a bad welcome gift for incoming PM Andy Burnham’,” noted Paul Dales, chief UK economist at Capital Economics research group.
Dales added that even if economic activity remained unchanged in June, Britain would still record overall growth of about 0.4 per cent during the second quarter of the year.
According to him, the figures suggest that the British economy has shown greater resilience to rising energy prices than many economists had anticipated.
“This suggests that the economy has been more resilient to the rise in energy prices” than expected, Dales said.
Despite the latest improvement, international forecasts indicate that economic growth is expected to moderate over the coming months.
The Organisation for Economic Co-operation and Development (OECD), in its latest outlook released on Wednesday, projected that the UK economy would expand by 0.9 per cent in 2026.
That would represent a slowdown from the estimated 1.4 per cent growth recorded in 2025.
The OECD, however, expects economic activity to strengthen again in 2027, forecasting that GDP growth will improve to 1.1 per cent as inflation eases and broader economic conditions stabilise.
The projections suggest that while Britain continues to face challenges linked to global uncertainty and elevated energy prices, the economy remains on a path of gradual recovery.
