The UK’s GDP dropped by 0.1% in May 2025, dealing another setback to Chancellor Rachel Reeves’ economic growth plan.
Data published by the Office for National Statistics on Friday (11 July) shows monthly real gross domestic product (GDP) is estimated to have fallen by 0.1% in May 2025, following an unrevised fall of 0.3% in April 2025 and growth of 0.4% in March 2025.
Real GDP is estimated to have grown by 0.5% in the three months to May 2025, compared with the three months to February 2025, largely driven by growth in the services sector in this period.
Services grew (+0.1%) in May, but production (-0.9%) and construction (-0.6%) both fell.
Commenting on today’s GDP figures, ONS Director of Economic Statistics Liz McKeown said the economy contracted slightly in May, following notable falls in production and construction, which were only partially offset by growth in services.
However, across the three months as a whole, the economy still grew, she said. “This reflected earlier strength in the year that resulted, in part, from some activity being brought forward to February and March.”
McKeown noted that May’s fall in production was driven by oil and gas extraction, car manufacturing and the often-erratic pharmaceutical industry.
“While services grew overall in May, with a strong month for legal firms, which recovered from a weak April, and computer programming, these were partially offset by a very weak month for retail sales,” she said.
The lower-than-expected numbers will come as a blow to Chancellor Reeves, who is set to unveil the Treasury’s Financial Services Growth and Competitiveness Strategy on Tuesday.
The strategy aims to boost her struggling growth agenda by rallying support from investors, banks, and fintech leaders she’s engaged with throughout the year.
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