UK economy grew by 0.1% in May despite impact of Iran war
The UK economy expanded 0.1% in May, recovering from a 0.1% decline in April, according to official figures. The International Monetary Fund has upgraded its 2026 GDP forecast for the UK to 1%.
The Office for National Statistics reported that UK GDP rose by 0.1% in May, matching economists' expectations, following a 0.1% contraction in April. Despite the April dip, the economy proved more resilient to the Middle Eastern conflict than some analysts had feared.
The International Monetary Fund recently raised its UK GDP growth forecast for the full year to 1%, up 0.2 percentage points from its April projection. However, the economic outlook remains highly uncertain, with oil prices surging again after the resumption of hostilities in the Middle East this week. This underscores the challenges facing new Labour leader Andy Burnham as he takes office.
The Resolution Foundation think tank estimates that more than half of the £23.6 billion in fiscal headroom left by outgoing Chancellor Rachel Reeves in her spring statement will be eroded by the war's effects.
