UK economy posts modest 0.1% monthly growth in May 2026

British gross domestic product rose by 0.1% in May 2026, reversing a 0.1% fall in April and delivering a 0.7% increase over the three months to May – the strongest pace since the Labour Party took power. The gain was driven by a 0.3% rise in services output, notably in computer programming, advertising and pharmaceuticals, while industrial production and construction contracted.

The improvement came as Andy Burnham prepares to become prime minister, with finance minister Rachel Reeves likely to be succeeded by Shabana Mahmood. Analysts noted the surprise, with Neil Birrell of Premier Miton saying, “Uncertainty around economic policy in Burnham’s government is likely to weigh on growth in the months ahead.” Meanwhile, Yael Selfin of KPMG warned that “the recent rise in energy prices, driven by a pick‑up in tensions in the Middle East, could pose a risk to the growth outlook.”

Despite the positive reading, concerns remain over higher energy costs, lingering geopolitical tensions in the Gulf, and a weakening procurement index that suggests a potential slowdown in June.