The Courier & Advertiser (Fife Edition)
Royal wedding gives UK economy a boost
Windsor event and warm weather helped retail sector
The UK economy benefited from a retail rebound in May as the sector received a “double boost” from warm weather and the royal wedding.
The Office for National Statistics (ONS) said the economy expanded 0.3% in May, while gross domestic product (GDP) rose 0.2% over the three months to May.
The ONS’ head of national accounts, Rob Kent-Smith, said it showed a “mixed picture of the UK economy with modest growth driven by the services sector, partly offset by falling construction and industrial output”.
He added: “Retailing, computer programming and legal services all performed strongly in the three months to May, while housebuilding and manufacturing both contracted.
“Services, in particular, grew robustly in May with retailers enjoying a double boost from the warm weather and the royal wedding.
“Construction also saw a return to growth after a weak couple of months.”
The readings are the first in the new set of rolling estimates of GDP by the statistic agency, which previously provided only quarterly estimates of growth.
The ONS figures show that in the three months to May, services output increased by 0.4% compared with the three months ending February.
Month on month, services rose 0.3%, with wholesale, retail and motor trade making the largest contribution.
But construction output continued its recent decline on a three-monthly basis, falling by 1.7% in May, its third consecutive decrease.
This was driven by a fall in new work, which also fell for the third consecutive month, decreasing by 2.5%.
PwC chief economist John Hawksworth said the recent rebound in services and construction output could result in a near doubling of growth in the second quarter, putting the Bank of England’s Monetary Policy Committee on track to raise interest rates next month.
He said: “We estimate that growth in the second quarter will end up at around 0.4%, given signs from business surveys of continued forward momentum in services and construction in June.”