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Economy

UK economy beats expectations as GDP jumps 0.4%

In the three months to May 2024, GDP grew by 0.9% compared with the previous three months

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UK gross domestic product (GDP) beat expectations in May, increasing 0.4%, as a result of better weather, according to data from the Office for National Statistics (ONS).

An unseasonably wet April dented consumer sentiment and hurt construction leading to the slight increase.

Construction grew at the fastest rate in almost a year in May, rising 1.9%, with house building and infrastructure projects boosting the industry.

The services sector, which dominates the UK economy and covers businesses such as hairdressers and hospitality, grew by 0.3% in May.

In the three months to May 2024, GDP also increased 0.9% compared with the previous three months.

That is the quickest pace for more than two years helped by strong growth in the services sector.

Analysts said the new figures, together with recent comments from Bank of England policymakers, meant the decision on whether interest rates will be cut next month was on a “knife-edge”.

Chancellor Rachel Reeves said economic growth was the government’s “national mission”, and “that is why this week I have already taken the urgent action necessary to fix the foundations of our economy”.

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