Britain’s Economy Surprises with Strong Growth in May

Britain's economy grew by 0.4% in May, surpassing expectations and providing a boost to Prime Minister Keir Starmer's administration. This growth could delay potential interest rate cuts by the Bank of England. The broad-based economic increase was driven by growth in services, manufacturing, and construction.

Britain’s economy grew more quickly than expected in May, providing momentum for the new government of Prime Minister Keir Starmer but adding doubts about whether the Bank of England will cut interest rates next month. Economic output increased by 0.4% in May after zero growth in April, according to the Office for National Statistics.

The strength of the upturn could dissuade the BoE from cutting interest rates in August. The chance of a rate cut in three weeks' time fell below 50% on the futures markets after three policymakers emphasized the strength of domestic price pressures.

May saw a broad-based increase in economic output, with services, manufacturing, and construction industries all growing. This represents an early boost for the Labour administration, which aims for the fastest growth among the Group of Seven economies on a sustained basis.