Heat and wedding charge economy

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 the economy expanded 0.3 per cent in May, while gross domestic product (GDP) rose 0.2 per cent over the three months to May. Both of those figures were in line with economists’ expectations.

The ONS’ head of national accounts, Rob Kentsmith, 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 said: “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 pound lost ground on the news to trade flat against the US dollar at 1.325. 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 in the three months to May, services output increased by 0.4 per cent compared with the three months ending February.

Month on month, services rose 0.3 per cent, 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 per cent in May – its third consecutive decrease.

Bank of England Governor Mark Carney said last week the incoming data gave him “greater confidence” that softer UK activity in the first three months of the year was “largely due to the weather, not the economic climate”.