In May, the UK economy grew by 0.4%, a faster rate than initially anticipated as the retail and building sectors experienced a strong month. In April, heavy rainfall had deterred shoppers and slowed down construction, leading to zero growth. However, construction increased at almost its highest rate of the year with house building and infrastructure projects driving the sector forward.
While the issues surrounding how to improve the country’s economic growth have been a key issue in the recent general election, the newly elected Labour government has introduced new measures aimed at boosting growth. These include reintroducing house building targets, reworking planning restrictions and ending the effective ban on onshore wind farms in England. A National Wealth Fund has also been introduced to attract investment in infrastructure and green industry.
While economists have warned against relying too heavily on fluctuations in monthly economic activity due to weather patterns, the three months to May 2024 saw gross domestic product (GDP) grow by 0.9% – the fastest pace in more than two years. This growth has been attributed to the expansion of the services sector – including hospitality and hairdressing businesses.
Liz McKeown, of the Office for National Statistics (ONS), highlighted the success of wholesalers and retailers in May, with both bouncing back after a dire April. The construction sector experienced a 1.9% growth in May, contributing to an overall expansion in economic activity.
The Labour government’s focus on boosting the economy is likely to be welcome news to many, including small business owners and entrepreneurs. However, only time will tell if the measures introduced will in fact lead to sustained and stable growth in the future
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