As Andy Burnham prepares to take over as the UK’s next Prime Minister, he has already received an early political boost.
Newly released figures from the Office for National Statistics show that the UK economy performed better than expected in May.
Gross domestic product (GDP), which measures the total value of goods and services produced across the country, grew by 0.1%, defying forecasts that predicted no growth after the economy shrank by the same amount in April.
This is the latest example of the UK economy outperforming expectations under Labour and Chancellor Rachel Reeves.
However, this is likely to be the last set of economic data with Reeves as chancellor, with Burnham widely expected to replace her at Number 11.
The Financial Times reported this week that Shabana Mahmood is likely to be appointed chancellor by Burnham.
Economy outperforms expectations but growth slows
The modest growth was largely driven by the services sector, which expanded by 0.3% during May.
Within the sector, some of the strongest performances came from areas including information and communications technology, science and research, and professional services.
According to the ONS, this increase was partly offset by a 0.5% decline in production and a 0.8% drop in the construction sector.
After a much stronger than expected start to the year, economic growth has slowed considerably.
The ONS recorded growth of 0.3% in March before the economy contracted by 0.1% in April, marking its first monthly decline in eight months.
The slowdown was partly attributed to the economic impact of the conflict with Iran, with businesses reporting that disruption to global supply chains caused by the conflict had become one of the most common challenges highlighted in the ONS’s monthly survey.
It noted that many companies reported the conflict had affected their supply chains and day-to-day operations.
Economists at Pantheon Macroeconomics said May’s stronger-than-expected performance means the UK economy is on course to grow by around 0.3% in the second quarter of the year.
While that would mark continued growth, it would also represent a slowdown from the 0.6% expansion recorded during the first three months of the year.
The cost-of-living crisis isn’t going anywhere
TUC General Secretary Paul Nowak welcomed the signs of economic growth, saying a stronger economy is key to improving employment opportunities and raising incomes.
However, he cautioned that the recovery is far from secure, with many workers still facing financial pressures and struggling with the rising cost of living.
He urged the new Prime Minister to prove that the government is on the side of working people by making improving living standards its top priority.