Drop in GDP makes tax rises yet more likely

May's unexpected 0.1% decline in GDP will make depressing reading for Rachel Reeves before a tough budget in the autumn.

- Heather Stewart

May's unexpected 0.1% decline in GDP will make depressing reading for Rachel Reeves before a tough budget in the autumn. Stronger than expected growth would have helped to alleviate the squeeze on the public finances - but there is nothing in this latest data pointing to an upturn.

The 0.1% fall in May is marginal, but it follows a 0.3% contraction in April. The Office for National Statistics (ONS) has revised up March's growth, to 0.4% - but barring a bumper June, it looks like the economy may well have been going backward in the second quarter of the year.