The U.K. economy grew by 0.5 percent in May, data from the national statistics office showed Wednesday, surprising analysts who had largely expected the economy to stagnate.
The statistics office also revised up its growth estimate for April, reporting a decline of 0.2 percent rather than the 0.3 percent fall seen previously.
In the three months to May, U.K. GDP increased by 0.4 percent, and by 3.5 percent in the 12 months to May. It’s now estimated to be 1.7 percent above its pre-pandemic levels.
While stronger-than-expected growth will be welcome news, the economy is set to face further challenges amid political turmoil and raging inflation — which hit a 40-year high of 9.1 percent in April.
After having raised interest rates five times since December, the Bank of England is expected to increase them again at its August monetary policy meeting. Governor Andrew Bailey has pledged that “bringing inflation back down to the 2 per cent target sustainably is our job, no ifs or buts.”