Slow economic growth amid Iran war pressures - Chamber

The UK economy returned to growth in May – although expansion was muted amid price pressures and supply chain issues due to the Iran war.

According to the Office for National Statistics (ONS), gross domestic product rose (GDP) by 0.1 per cent in May, following a 0.1 per cent contraction in April.

The meagre growth came after expansion of 0.3 per cent in the services sector, which was partly offset by falls of 0.5 per cent in production and 0.8 per cent in construction, the ONS said.

In the three months to May, GDP increased by 0.7 per cent after upwardly revised growth of 0.8 per cent in the three months to April.

Raj Kandola (pictured), deputy CEO at Greater Birmingham Chambers of Commerce, said: “These figures underline just how fragile the UK economy remains, with businesses continuing to face pressure from geopolitical uncertainty and rising domestic costs.

“Growth of 0.7 per cent in the three months to May is welcome, but the marginal 0.1 per cent increase recorded in May itself demonstrates that the new government faces the same challenges as its predecessor.

“Businesses across Greater Birmingham are feeling the impact of higher energy prices, disruption to global shipping routes and increased employment costs, all of which are affecting confidence and investment decisions.

“The new government must place business at the heart of its economic strategy from day one.

“That means taking urgent steps to reduce the cost of doing business while creating the conditions needed to unlock investment, strengthen international trade and drive productivity across Greater Birmingham and the wider UK economy.”