The UK's gross domestic product (GDP) growth slipped by 0.1 per cent in May 2025, according to the latest figures from the Office for National Statistics (ONS).
This follows a 0.3 per cent contraction in Britain's economy over April as Chancellor Rachel Reeves attempts to bolster GDP growth as part of her fiscal agenda.
Over March to May 2025, GDP jumped by 0.5 per cent over the quarter, which is slightly above the 0.4 per cent previously forecast.
Despite this, May posted a 0.1 posted monthly decline, which is against the expected 0.1 per cent increase.
Rachel Reeves has been dealt another blow to the GDP growth
GETTY / ONS
Professor Joe Nellis, an economic adviser at accountancy firm MHA, said: "This is a far cry from the strong growth in the first quarter of the year when a surge in exports and a robust performance in the services sector placed the UK among the G7’s top performers.
"Growth over the first half of the year is now expected to be modest. Despite a more positive outlook for the remainder of the year, this presents a challenge to the Chancellor — her fiscal headroom remains limited by high levels of public borrowing and debt and her spending plans are heavily reliant on kickstarting the economy.
"Just as last year, we now wait tentatively for the Autumn Budget to find out how the Chancellor aims to solve her fiscal problems."
Over the period, monthly services output rose by 0.1 per cent in, following a fall of 0.3% in April 2025. This was revised up from a 0.4 per cent fall in the ONS previous publication.
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How has GDP growth changed in recent years?
ONS
Production output fell by 0.9 per cent in May 2025, following an unrevised fall of 0.6 per cent in April 2025, but grew by 0.2 per cent in the three months to May 2025
Construction output slipped by 0.6 per cent in May 2025, following growth of 0.8 per cent in April 2025. This was revised down from 0.9 per cent growth in our previous publication, but grew by 1.2 per cent in the three months to May 2025.
Nellis added: "Something must change — she must either cut spending, increase borrowing, or raise taxes. We expect a squeeze on unprotected Government budgets to cut spending, but the recent rebellion in the Labour Party against the welfare reform bill shows that major spending cuts may be too politically dangerous for the Government.
"The OBR’s July report highlighted the intense burden that the triple lock on the state pension places on the UK economy — demographic and economic shifts have made this policy difficult to uphold, but any attempt to undo it would move the Government into treacherous waters."
Which sector contributed the most towards GDP growth
ONS
Scottish Friendly savings expert Kevin Brown added: "After a weak showing in April, this month’s GDP data is another bitter pill for the Chancellor.
"The UK’s finances were already showing real strain, and this leaves the Chancellor with more holes to fill. It is the fiscal equivalent of whack-a-mole – every time Rachel Reeves solves one problem, another emerges.
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"Real challenges lie ahead. The Government’s failure to push through welfare cuts has blown a hole in its budget likely to be filled by tax rises in the Autumn. While there remains considerable speculation on what those tax rises might be, they could slow UK economic growth even further."
Liz McKeown said: “The economy contracted slightly in May with notable falls in production and construction, only partially offset by growth in services. However, across the latest three months as a whole, the economy still grew.
“This reflected strength earlier in the year that resulted, in part, from some activity being brought forward to February and March.
"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."