The economy grew faster than expected in May, new figures show, as the newly elected Labour government embarks on its “national mission” of restoring sustained economic growth.
Gross domestic product (GDP) grew 0.4 per cent in May, according to data from the Office for National Statistics (ONS), which was ahead of economists’ expectations. They had expected the economy to grow 0.2 per cent.
The strong expansion in May ensured that the economy returned to growth after stagnating in April.
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The expansion was led by the all-important services sector, which grew 0.3 per cent. Production rose 0.2 per cent while construction rose 1.9 per cent after recovering from a rainy April.
The figures get the economy back on track after a disappointing April. After falling into a technical recession at the end of last year, the UK recovered and was the fastest-growing G7 economy in the first quarter.
Looking at the longer term, though, the picture is less rosy. The UK’s performance since the pandemic has been lacklustre, beating only Germany among G7 economies.
The economy is just 1.8 per cent larger than it was on the eve of the pandemic. The US economy, by contrast, is 8.6 per cent larger.
The new Labour government has put restoring economic growth at the heart of its policy agenda. Speaking to Treasury officials on Friday, Chancellor Rachel Reeves said: “The central mission of this government will be to restore economic growth.”
Reeves has already taken steps to relax some key planning constraints and has established a National Wealth Fund to catalyse private sector investment.
Wes Streeting, the new health secretary, has said the NHS will play its part in generating growth, saying the health department would be an “economic growth department” under his watch.
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