UK economy returns to growth in May

The UK economy returned to growth in May, offering a modest boost to business confidence, although ongoing geopolitical tensions and supply chain disruption continue to cloud the outlook for businesses and investors.

Figures released by the Office for National Statistics (ONS) show that UK gross domestic product (GDP) increased by 0.1% in May, reversing April’s 0.1% contraction. The improvement was driven by a 0.3% increase in the services sector, although this was partially offset by declines of 0.5% in production and 0.8% in construction.

Over the three months to May, GDP grew by 0.7%, marking the sixth consecutive rolling three-month period of growth, although the pace eased slightly from the revised 0.8% recorded in the three months to April.

The latest figures suggest the economy has maintained positive momentum despite mounting pressures from rising energy prices, supply chain disruption and weaker business confidence linked to ongoing conflict in the Middle East.

Liz McKeown, Director of Economic Statistics at the ONS, said: “The economy recorded robust growth in the three months to May, though the pace eased slightly as the latest two months showed a weaker picture.

“Computer programming and advertising led the way, while the often-volatile pharmaceutical industry also performed well.”

The ONS noted that businesses across manufacturing, hospitality, travel and entertainment reported that geopolitical tensions had affected trading conditions during the month, with higher fuel costs and disrupted supply chains weighing on activity.

The latest GDP data follows a stronger-than-expected start to 2026, when the economy expanded by 0.3% in March before slipping back in April.

“The latest release from the ONS indicates that the UK economy is holding strong, posting growth of 0.7% in the three months to May,” he said.

“This will be welcome news to the nation’s SMEs, particularly medium-sized businesses, whose innovation, investment and ability to adapt play a vital role in driving UK growth.

“Whilst businesses continue signalling resilience, the broader macroeconomic and geopolitical environment remains tense and challenging, disrupting supply chains and weighing on confidence. For the SMEs managing these headwinds, securing the right external funding remains crucial to executing their growth plans in a complex market.”

While the return to monthly growth provides some reassurance, economists continue to warn that persistent geopolitical uncertainty and elevated costs could limit the pace of expansion during the second half of the year, leaving business investment and access to finance as critical drivers of future growth.