The UK economy returned to growth in May, rising 0.1% despite the impact of the Iran war on energy costs, according to official figures from the Office for National Statistics (ONS). This modest expansion matched economists' forecasts, following a 0.1% decline in April.
The data suggests the economy has shown more resilience than some analysts feared, even as the Middle East conflict pushed up energy prices and disrupted supply chains. Rachel Reeves, the outgoing chancellor, is expected to view the figures as validation of her economic plan.
Key GDP Data for May
The ONS reported that services output rose 0.3% in May, but this was partly offset by a 0.5% decline in production and a 0.8% fall in construction. The strongest contributor was scientific research and development, which surged 5.1%.
| Sector | Monthly Change |
|---|---|
| Services | +0.3% |
| Production | -0.5% |
| Construction | -0.8% |
| Scientific R&D | +5.1% |
Three-Month Trends and Expert Views
Over the three months to May, GDP growth was 0.7%, a slight slowdown from 0.8% in the three months to April. ONS director Liz McKeown noted robust growth but a weaker picture in recent months. However, analysts warn that GDP may remain stagnant over the second full quarter.
Suren Thiru of the ICAEW described the rebound as "dishearteningly weak," citing the Iran conflict's suppression of construction and industrial production. The British Chambers of Commerce called for urgent support for firms facing rising costs from energy and shipping disruptions.
Impact of Iran War on UK Economy
The Iran war has increased energy costs and created uncertainty across sectors. Rising oil prices and shipping delays are squeezing margins for businesses, particularly in manufacturing and construction. The ONS data highlights the fragility of the recovery amid geopolitical tensions.
Key Takeaways
- UK GDP grew 0.1% in May, matching forecasts after April's dip.
- Services sector led growth at +0.3%, but production and construction fell.
- Scientific R&D surged 5.1%, providing a bright spot.
- Three-month growth slowed to 0.7%, signaling weaker momentum.
- Iran war continues to pressure energy costs and supply chains.
FAQ
What was the UK GDP growth in May 2025?
The UK economy grew by 0.1% in May 2025, according to the Office for National Statistics, rebounding from a 0.1% decline in April.
How did the Iran war affect the UK economy in May?
The Iran war increased energy costs and disrupted shipping, suppressing activity in construction and industrial production, though services showed resilience.
Which UK sectors performed best and worst in May?
Services grew 0.3%, with scientific R&D up 5.1%. Production fell 0.5% and construction dropped 0.8%, reflecting the war's impact.
Shop premium products at GrandGoldman.com
