- UK GDP grew 0.5% in May after two months of contraction
- Doctor visits and travel agent boom play a big part
- Retail a drag on growth as people watch the pennies
“After all the doom and gloom about the state of the British economy May’s growth figures might have some people wondering what all the fuss has been about. A slight uptick had been anticipated, but at 0.5% the pace of growth has caught many by surprise. Put simply, people have been living their lives, playing catch up, and doing all that housekeeping they hadn’t yet been able to get round to.
“Anyone who has tried to book an appointment with their doctor over the last few weeks won’t be surprised to learn that GP visits have played a big part in boosting May’s numbers, something which has offset the drag from a real tapering off of test and trace operations and booster vaccine programmes.
“Then there’s our desperate rush to feel a bit on sun on our faces, to finally make use of those ‘new blue passports’ and travel again. Despite the chaos seen at airports during the Easter break people haven’t been put off booking holidays and they’ve still got money set aside to enable them to take a trip or two.
“Manufacturers have really turbo charged operations despite all the price hikes they’ve experienced. It suggests that supply blockages may finally have worked their way through the system and that many have been able to pass on extra costs to their customers.
“Construction has had another great month, bolstered by housebuilding in a market that’s only slightly coming off the boil, and by the changing requirements of business that need to reconfigure workspaces after covid restrictions or embrace new ways of working.
“These figures represent just one month - albeit a crucial one because it means the quarter as a whole doesn’t meet the criteria for negative growth - but one month can never tell the whole story.
“There are headwinds that are impossible to ignore. Retailers, hospitality venues, gyms, museums and children’s play centres are all feeling the weight of high inflation. Households are strategically cutting back on their spending, which is a particular blow to the consumer services which still haven’t been able to get anywhere near their pre-pandemic glory days.”
