UK economy shrank unexpectedly in May

The UK economy shrank unexpectedly in May, as the manufacturing sector suffered another steep decline in activity, according to official figures.

The Office for National Statistics (ONS) said on Friday that gross domestic product (GDP) had contracted by 0.1% in May, following a 0.3% drop in April.

Most economists had expected slight growth of 0.1% in May.

Chancellor Rachel Reeves said the figures showing a contraction in the economy for the second month in a row were “disappointing”.

She said: “Getting more money in people’s pockets is my number one mission.

“While today’s figures are disappointing, I am determined to kickstart economic growth and deliver on that promise.”

She added: “There’s more to do, that’s why in the spending review we boosted investment and jobs, through better city region transport and record funding for affordable homes, as well as backing major projects like Sizewell C.”

It comes after activity in the manufacturing sector dropped 1%, following a steep fall in April, having surged earlier in the year as US importers stocked up ahead of US President Donald Trump’s tariff rises, which came into effect at the start of April.

ONS director of economic statistics Liz McKeown said: “The economy contracted slightly in May with notable falls in production and construction, only partially offset by growth in services.

“However, across the latest three months as a whole, the economy still grew.

“This reflected strength earlier in the year that resulted, in part, from some activity being brought forward to February and March.”

She added: “While services grew overall in May with a strong month for legal firms, which recovered from a weak April, and computer programming, these were partially offset by a very weak month for retail sales.”