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Economy records 0.4% growth in May after hit from wet weather

The Office for National Statistics (ONS) recorded gross domestic product growth of 0.4% in the month, compared to its earlier determination of zero growth during April.

Then, conditions more akin to a monsoon than April showers dented consumer sentiment and hurt construction.

On a quarterly basis, the UK’s interest rate-driven recession of the second half of 2023 ended at the start of this year as the Bank of England ended its rate hiking cycle which was designed to cool inflation by choking demand in the economy.

Eagerly anticipated interest rate cuts have, however, proved elusive during 2024 due to stubborn elements including the pace of price rises for services and high wage growth.

The new Labour government has prioritised securing economic growth, with measures to date including the creation of a national wealth fund.

Lower borrowing costs, which financial markets think remain possible through a rate cut following the Bank’s next meeting on 1 August, would aid that effort.

That prospect was not aided this week when a member of the Bank’s rate-setting committee said he would not be in favour of a reduction from 5.25% to 5%.

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