FX.co ★ UK GDP Unexpectedly Shrinks for 2nd Month

In May 2025, the British economy experienced a slight contraction of 0.1% compared to the previous month. This follows a 0.3% decrease in April, and it contrasts with expectations of a 0.1% increase, indicating potential struggles for the economy in the second quarter. There was a notable 0.9% reduction in production output, which extended the 0.6% decline recorded in April. This downturn was largely driven by a 1% drop in the manufacturing sector, particularly in the production of basic pharmaceutical products and preparations, which fell by 4.2%, and the manufacture of transport equipment, which decreased by 1.3%. The mining and quarrying sector also saw a decline of 3.2%. Conversely, there were gains in water supply, sewerage, waste management, and the supply of electricity, gas, steam, and air conditioning, which increased by 0.8% and 0.3%, respectively. Construction output, meanwhile, contracted by 0.6% after an 0.8% growth in April. On the other hand, the services sector saw a modest expansion of 0.1%, recovering from a 0.3% decrease in the previous month. Notably, the information and communication subsector surged by 2%, primarily driven by computer programming, consultancy, and related activities, which grew by 3%, making it the biggest positive contributor. Over the three months leading up to May, the UK's GDP rose by 0.5%.