UK May GDP Rises 0.1% on Services Growth, Matches Forecasts

The UK Office for National Statistics (ONS) reported that May real gross domestic product (GDP) increased 0.1% month-over-month, matching market expectations. The growth was driven by a 0.3% expansion in the services sector, partially offset by a 0.5% decline in production and a 0.8% decline in construction. The 3-month rolling average real GDP rose 0.7% compared to the previous 3-month period, showing slower growth than the 0.8% increase through April but faster than the 0.6% increase through March.

Services Sector Drives May GDP Growth

The ONS stated that "the May GDP increase was attributable to a 0.3% rise in the services sector, which was partially offset by a 0.5% decline in the production sector and a 0.8% decline in the construction sector." Over the 3-month period through May, the services sector increased 0.7% compared to the previous 3-month period, while production and construction sectors rose 0.1% and 1.6% respectively.

Industrial Production Falls Below Expectations

May industrial production declined 0.5% month-over-month, underperforming the market expectation of a 0.1% decline. The steeper-than-expected contraction in manufacturing activity contributed to the overall production sector weakness reported for the month.

Trade Deficit Narrows to 1.044 Billion Pounds

The May trade balance recorded a deficit of 1.044 billion pounds, narrowing from the previous deficit of 8.435 billion pounds. The 3-month trade deficit through May totaled 9.1 billion pounds, representing a 4.4 billion pound increase in the deficit compared to the previous 3-month period.

Pound Weakens Against Dollar Following Data Release

The British pound continued its decline against the US dollar following the data release. As of 3:30 PM, the GBP/USD exchange rate traded at 1.35350 dollars, down 0.05% from the previous session.

FAQ

What did the UK ONS report for May GDP growth?

The UK Office for National Statistics reported that May real GDP increased 0.1% month-over-month, matching market expectations, driven by a 0.3% expansion in the services sector.

How did UK industrial production perform in May?

May industrial production declined 0.5% month-over-month, falling short of the market expectation of a 0.1% decline and contributing to the production sector's overall 0.5% contraction for the month.