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UK economy shrinks by less than expected in May

The surprise indicates the Bank of England’s policy is still lagging.

13 July 2023

The UK economy shrank by less than expected in May, with GDP falling 0.1% versus expectations of a 0.3% decline. While a lot of this contraction was most likely down to the additional bank holiday around the King’s coronation and the striking workforce in the public sector, it is a little surprising to see an economy doing less badly than predicted. The Bank of England (BoE) wants to see a contraction as direct evidence its ‘war on inflation’ strategy is working and will be a little confused that its policy to date is still lagging.

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Charles Hepworth

Investment Director
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