Britain’s economy grew by 1.4% year-on-year in May, outstripping the expected growth rate of 1.2% and doubling April’s 0.7% gain.
Month on month, gross domestic product grew by 0.4%, an upside surprise following a zero-growth period in April.
“This should be a boon for the new Labour government with growth now likely to outstrip the OBR’s 2024 GDP forecasts, partially offsetting some of the projected increase in interest rate costs,” said Deutsche Bank’s chief UK economist Sanjay Raja.
According to Rob Morgan, chief investment analyst at Charles Stanley (LSE:CAY): “The UK’s economic scorecard shows significant room for improvement under the incoming Labour government.
“The UK economy has been subdued coming out of the pandemic, an energy crisis, and a cost-of-living crisis which has been very difficult for UK consumers.
“However, tepid growth now looks to be warming up heading into the second half of the year.”
Morgan said today’s GDP data “illustrates we are in the midst of a very gentle upswing in activity following a slowdown in 2023”.