The United Kingdom’s economy experienced a contraction in May, primarily due to a slide in industrial output. This decline is seen as a consequence of the impact of rising interest rates on economic activity.
According to data from the Office for National Statistics, the country’s gross domestic product (GDP) recorded a 0.1% decline in May, following a 0.2% growth in April. Although this figure was slightly better than the 0.2% fall predicted by economists in a poll conducted by The Wall Street Journal, it still highlights the economic challenges faced by the UK.
Industrial production, which dropped by 0.6% in May, played a major role in this decline. This represents a further weakening from the 0.2% fall seen in April. This trend was accompanied by a 0.2% decrease in the construction sector in May, while output in the services sector remained stagnant for the month.
Comparing the three months leading up to May with the preceding three months ending in February, the UK’s GDP showed no growth. However, monthly GDP is currently estimated to be 0.2% higher than pre-pandemic levels in February 2020, according to the ONS.
These findings underscore the challenges faced by the UK economy as it grapples with the ongoing effects of rising interest rates and fluctuations across various sectors.