It signaled some recovery in Gross Domestic Product (GDP) after a difficult few months, with the latest data showing upward revisions to early estimates for March and April to 0.1% and -0.2% respectively. The latest figure was more positive than economists had expected, with zero growth for May given pressures on output from the cost-of-living energy crisis, with inflation at a 40-year high. However, ONS director of economic statistics Darren Morgan said: “The economy bounced back in May with growth across all main sectors. “Health was the biggest driver with many more people visiting GPs, despite test and trace and vaccination programs ending. “Road hauliers also had a busy month, while travel agencies did well with reduced demand for summer holidays. “There was broad-based growth across manufacturing after several difficult months, while construction did well with house-building and office renovations leading growth.” The official figures were released amid a shift in government focus as the Conservatives begin their search for a new leader – and prime minister – after pushing Boris Johnson towards the Number 10 exit last week. Use Chrome browser for more accessible video player 2:32 How can the resignation of the prime minister affect the economy? While handling the tough economy through the cost-of-living crisis dominated early exchanges in the leadership contest, the debate focused on the candidates’ tax commitments and spending. Only former chancellor Rishi Sunak ruled out further, immediate help for families beyond the £37bn package he signed before his own resignation at the Treasury. His replacement at No 11 – and fellow challenger for the top job in government, Nadhim Zahawi – said of the GDP figures: “It’s always great to see the economy growing, but I’m not complacent. “I know people are concerned, so we continue to support families and economic growth. “We are working together with the Bank of England to reduce inflation and I am confident that we can create a stronger economy for everyone across the UK.” The leadership distraction comes as CBI business lobby group director-general Tony Dunker warns in an open letter to the eight hopeful leaders that the economy cannot afford two months on hold. A report by the living standards think tank Resolution Foundation, also released on Wednesday, claims British families are almost £9,000 worse off than those in comparable countries including France, Germany and Australia. The study found that the poorest households were at an even greater disadvantage, with their incomes 40% behind such nations. Experts from the London School of Economics who worked on the ‘nation of stagnation’ report blamed a ‘toxic combination’ of low growth, low productivity and inequality.
