UK Economy Grows 0.1% in May Despite Iran War Impact: Services and R&D Show Resilience

The UK economy grew by 0.1% in May, defying expectations amid the Iran war's energy cost pressures. This follows a 0.1% decline in April, marking the first growth period in recent months. Services sector surged by 0.3%, but production and construction saw declines of 0.5% and 0.8%, respectively. Scientific research and development led with a 5.1% increase. Over three months, GDP growth stood at 0.7%, though stagnation risks persist for the second quarter. Analysts noted the Iran conflict suppressed construction and industrial output, while Rachel Reeves' economic policies appeared supported by the data. Forecasts remain cautiously optimistic at 1% GDP growth, though rising oil prices and geopolitical risks pose challenges for incoming Chancellor Andy Burnham.