The UK economy stopped growing in May, following a 0.4% growth in March, according to official data released on Wednesday.
Jerrymusa.com reports that this development comes ahead of the country’s general election on July 4, which is expected to see the opposition Labour party defeat the incumbent Conservative party, led by Prime Minister Rishi Sunak.
“The stagnation in GDP in May doesn’t mean the economic recovery has been extinguished, but it’s hardly great news for the prime minister three weeks ahead of the election,” said Paul Dales, chief UK economist at Capital Economics.
UK’s Economic Performance
A breakdown of the data shows a mixed performance, with services growing 0.2%, production falling 0.9%, and construction declining 1.4%.
Britain had earlier emerged from a brief recession with growth in the first quarter of 2024. The country’s cost-of-living crisis, fueled by high inflation, continues to persist.
In response, Sunak has promised “tax cuts and lower immigration” to woo voters, funding these measures by reducing welfare payments to working-age individuals.
Meanwhile, unemployment has risen, and inflation data is expected next week, with the Bank of England likely to maintain its high interest rate.
“We will pay for lower taxes by cracking down on welfare payments to working-age recipients,” Sunak said.
The election is expected to be a close contest, with Labour leader Keir Starmer hoping to capitalize on the economic uncertainty.