Britain's economy grew by 0.3% in May driven by services

Irving Hamilton
July 10, 2018

A new monthly reading of gross domestic product showed the world's fifth-biggest economy grew by 0.3% in May from April.

They added that it will be the final estimate before the Bank's next interest rate meeting on August 2 and should give the MPC confidence that the softness of the economy in the first quarter "was a blip".

Andrew Wishart, a United Kingdom economist at Capital Economics, a consultancy, said that growth was "a little weaker than expected" but that a continuation of May's performance in June would point to second-quarter growth of 0.4 per cent, in line with the MPC's forecast. Growth came mostly from the dominant services sector while factory output disappointed.

The ONS said the data provided a mixed picture of the economy, which was showing only modest growth.

The UK economy grew by 0.2% in the three months to May, as expected, after stagnating in the three months to April.

Bank Governor Mark Carney has said recent data made him confident the slowdown "was largely due to the weather" - his remark prompted the pound to rise against the dollar.

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In annual terms, the economy was 1.5 percent bigger than in May a year ago, the ONS said.

However, the new monthly GDP estimate - which the government's statisticians caution is a more volatile measure - showed growth of 0.3 per cent during the month, up from 0.2 per cent in April, with the ONS crediting the royal wedding and warmer weather for a boost to retailers in particular.

Britain's services industry grew 0.3 percent month-on-month in May, slowing from an upwardly revised 0.4 percent in April.

Over the three months to May, growth in the services sector - which makes up 80% of the economic output - picked up speed to 0.4% from 0.2%.

Unplanned maintenance at Sullom Voe oil & gas unit hit mining & quarrying.

There was better news from construction, which had struggled in the bad weather of early 2018.

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