Stories

Thu, 16 Jul 2026

Thu, 16 Jul 2026 UK economy returns to growth in May

The modest growth reverses a slight contraction that had been seen the previous month.

* UK economy grew by 0.1% in May, driven by expansion in service sector
* Growth was modest due to impact of Iran war on businesses
* Expansion offset by falls in production and construction sectors
* Economy saw strong start to year but growth faltered in recent months
* Conflict in Middle East affected some businesses with increased energy prices and disrupted supply chains
* Price of oil rose from $72 to $84 a barrel since hostilities resumed between US and Iran
* Analysts say economy remains "fragile" and incoming Prime Minister Andy Burnham faces challenge to boost growth
* Economy grew by 0.7% over three months to May, compared with previous three-month period
* Service sector led the way in growth, with computer programming and advertising performing well