Overview
- The Office for National Statistics said on Thursday that monthly GDP rose 0.1% in May after a 0.1% fall in April, and that output was up 0.7% over the three months to May.
- The services sector drove the monthly gain with growth of 0.3%, while production fell 0.5% and construction declined 0.8%, leaving the recovery narrowly balanced on services activity.
- ONS business survey responses and analysts link weaker manufacturing and construction to supply‑chain disruption and higher fuel and wholesale energy costs caused by the US–Israel–Iran conflict.
- Andy Burnham will take office next week and is expected to reshuffle the Treasury, with Shabana Mahmood widely tipped as a leading candidate for chancellor, a change that markets have already begun to price in.
- The OECD and IMF have warned of modest 2026 growth and rising public debt, which, together with volatile energy prices and the Bank of England's July 30 policy review, limit the new government's room to tax or spend and risk squeezing living standards.