UK economy returns to growth, aided by upturn in travel and transport | Business news


According to official figures, the British economy grew by 0.5% in May.

It marked a sort of rebound in gross domestic product (GDP) after a few difficult months, with the latest data showing upward revisions of early estimates for March and April to 0.1% and -0.2% respectively.

The latest figure from the Office for National Statistics (ONS) was more positive than economists had expected, with zero growth forecast for May given pressures on the output of the energy-driven cost of living crisiswith inflation at a 40 years high

Darren Morgan, ONS director of economic statistics, said: “The economy recovered in May with growth in all major sectors.

“Health was the biggest driver with many more people seeing GPs despite testing and tracing and the vaccination programs coming to an end.

“Road hauliers also had a busy month, while travel agents did well with a low demand for summer holidays.

“After several difficult months, there was widespread growth in production, while construction also performed well, with housing and office renovation driving growth.”

The official figures were released amid a shift in focus for the government as conservatives start their search for a new leader — and Prime Minister — after pushing Boris Johnson to the exit door of number 10 last week.

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While coping with the tough economy through the cost of living crisis dominated early leadership contest exchanges, the debate centered on the candidates’ tax and spending obligations.

Only former Chancellor Rishi Sunak has ruled out further, immediate aid for families on top of the £37bn package he signed ahead of his own resignation from the Treasury.

Nadhim Zahawi, his number 11 replacement and co-challenger for the top government job, said of the GDP figures: “It’s always great to see the economy growing, but I’m not complacent.

“I know people are concerned, so we will continue to support families and economic growth.

“We are working with the Bank of England to reduce inflation and I am convinced we can create a stronger economy for everyone in the UK.”

The leadership distraction comes as the director general of the CBI’s corporate lobby group, Tony Danker, warns in an open letter to the eight hopeful leaders that the economy cannot afford a two-month shutdown.

A report from the Resolution Foundation, the standard of living think tank, also released on Wednesday, claims British families are nearly £9,000 worse off than those in comparable countries, including France, Germany and Australia.

The poorest households were even more disadvantaged, with their incomes 40% behind such countries, the study found.

Researchers at the London School of Economics who worked on the “stagnation” report blamed a “toxic combination” of low growth, low productivity and inequality.

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