Holiday bookings help spur GDP growth
UK gross domestic product figures (GDP) released this morning show a 0.5 per cent growth, largely reflecting new figures for Greater Birmingham.
The figures came as a pleasant surprise for the City after a decline of 0.2 per cent in April (revised up from a 0.3 per cent fall).
UK GDP increased by 0.4 per cent in the three months to May 2022, and by 3.5 per cent in the 12 months to May 2022.
Services output grew by 0.4 per cent in May as human health and social work activities grew by 2.1 per cent, mainly because of a large rise in GP appointments, which offset the continued scaling down of the NHS Test and Trace and Covid-19 vaccination programmes.
Output in consumer-facing services fell by 0.1 per cent in May, driven by a 0.5 per cent fall in retail trade, and non-consumer facing services grew by 0.5 per cent in May, following a fall of 0.8 per cent in April.
Production grew by 0.9 per cent in May, driven by growth of 1.4 per cent in manufacturing and 0.3 per cent in electricity, gas, steam and air conditioning supply.
Construction grew by 1.5 per cent in May, following 0.3 per cent growth in April. This is construction's seventh consecutive month of growth
Raj Kandola (pictured), head of policy and strategic relationships, said: “Many city analysts would have been pleasantly surprised at this morning 's GDP figures for May as growth was spurred by a rise in holiday bookings and GP appointments.
“The results largely mirror what we 're seeing locally - early analysis from our latest Quarterly Business Report revealed a strong quarter for domestic sales over the past three months.
“Nevertheless, concerns remain over the longer-term prospects for growth - particularly as surging inflation continues to bite and have a direct impact on consumer spending levels.
“It 's clear that over the next few months, the political bandwidth will be dominated by the selection of a new Prime Minister; however, there 's real anxiety amongst businesses that the paralysis at the top of Government could see us sleepwalk into a recession if we 're not careful.
“Ultimately, direct fiscal intervention is needed to offset the debilitating impacts of inflation and alleviate the crippling cash pressures that many firms are still facing right now. ”
The QBR Q2 Briefing takes place next week on Tuesday 19 July. There are currently over 90 individuals attending the flagship event and spaces are limited.