Shoppers cross the road at Oxford Circus in central London’s shopping district, Britain, October 19, 2020. ― Reuters file pic
Wednesday, July 13, 2022 3:41 PM MYT
LONDON, July 13 ― Britain’s economy rebounded in May, official data showed today, easing fears of a slowdown despite soaring inflation and rising interest rates.
Gross domestic product rose 0.5%, the Office for National Statistics said in a statement, beating expectations of no growth.
“The economy rebounded in May with growth across all major sectors,” said Darren Morgan, director of economic statistics at the ONS.
The broad rebound was led by a rebound in construction, manufacturing and services.
This follows a 0.2% decline in April, which was revised up from a 0.3% contraction.
“Health was the main driver, with many more people seeing GPs, despite testing and tracing and the end of vaccination programs,” Morgan added.
“Road carriers also had a busy month while travel agencies held up well against pent-up demand for summer holidays.
“There was broad-based growth in manufacturing after several difficult months, while construction also performed well, with housing construction and office renovation fueling growth.”
The Bank of England has hiked interest rates five times since December in a bid to rein in runaway inflation, which has sparked a cost of living crisis in Britain.
Inflation in the UK has hit a 40-year high of 9.1%, a level that is expected to reach double digits this year due to soaring energy and food prices according to the BoE.
Capital Economics analyst Paul Dales said the economy was “resilient” but warned of the lingering risk of recession due to soaring consumer prices.
“It is far too early to conclude that the economy will be able to weather this period of unusually high inflation largely unscathed,” Dales said.
“With real household disposable income expected to decline further in the third quarter, a recession remains a real risk.” The UK government meanwhile welcomed today’s upbeat data.
“It’s always great to see the economy growing but I’m not complacent,” Finance Minister Nadhim Zahawi said.
“I know people are worried, so we continue to support families and economic growth.”
Zahawi is one of eight Tory MPs vying to become Britain’s next prime minister following the resignation last week of scandal-hit Boris Johnson as leader of the Conservative Party. -AFP