---
title: "UK economy returns to growth in May after a spring stumble"
description: "Britain's economy grew by 0.1% in May, recovering from a contraction the month before, as the services sector offset continued weakness in manufacturing and construction. The figures give the incoming government a fragile foundation as it prepares to take office."
category: "Business"
category_url: https://newsparlor.com/category/business
author: "Hannah Brooks"
published: 2026-07-16T07:22:00.000Z
updated: 2026-07-16T07:22:00.000Z
canonical: https://newsparlor.com/article/uk-economy-returns-to-growth-may-2026
tags: ["uk-economy", "gdp", "services", "ons", "growth"]
---
# UK economy returns to growth in May after a spring stumble

Britain's economy grew by 0.1% in May, recovering from a contraction the month before, as the services sector offset continued weakness in manufacturing and construction. The figures give the incoming government a fragile foundation as it prepares to take office.

The UK economy edged back into growth in May, expanding by 0.1% after shrinking the previous month, according to figures from the Office for National Statistics. The modest rebound suggests the economy is grinding forward rather than gathering pace.

The return to growth followed a [0.1% contraction in April](https://www.ons.gov.uk/economy/grossdomesticproductgdp), the first monthly fall since August 2025, which had itself come after a stronger 0.3% expansion in March. Taken together, the run of figures points to an economy that is broadly flat, nudging up in some months and down in others rather than establishing clear momentum.

## Services carry the load

As has often been the case, the dominant services sector did the heavy lifting. Output from services, which make up the bulk of the UK economy, rose in May and more than offset declines elsewhere. Manufacturing and construction remained subdued, with firms in both sectors reporting caution amid uncertain demand.

That imbalance is a familiar feature of Britain's recent performance. A resilient services industry, spanning everything from professional and financial services to hospitality, has repeatedly kept the headline number in positive territory even as the more cyclical goods-producing sectors struggle. Economists caution that growth so narrowly based is vulnerable to any knock to consumer or business confidence.

## Global headwinds

The wider backdrop remains challenging. The war between the United States and Iran has pushed up global energy prices and rattled markets, adding to costs for businesses and squeezing household budgets at a time when many are already stretched. Forecasters have warned that the conflict poses a risk to growth across the advanced economies, with energy-importing countries such as the UK particularly exposed.

Against that, a return to growth, however slight, offers a measure of reassurance that the economy has not tipped into a sustained downturn. But the pace falls well short of what would be needed to lift living standards meaningfully or to ease the pressure on the public finances.

## A handover looms

The data lands at a moment of political transition. Keir Starmer resigned as prime minister in June after a bruising set of local election results, triggering a Labour leadership contest that Andy Burnham won, and Burnham is due to take over in the coming days. The state of the economy will be among the most pressing items in his in-tray.

Whoever holds the keys to the Treasury will face the same underlying dilemma: how to nurture growth without loosening the public finances so far that markets take fright. The May figures underline how delicate that task has become, with an economy that is expanding, but only just, and heavily reliant on a single sector to stay in the black.

For households, the practical picture is little changed. Growth of a tenth of a percent does not, by itself, alter the cost of the weekly shop or the size of a mortgage payment. But the direction of travel matters, and a return to growth, even a marginal one, is a better starting point than another month of contraction as the country waits for its next government to take shape.