Chancellor admits latest GDP figures 'disappointing'

THE UK economy contracted unexpectedly in May, marking the second month in a row of falling output, and heaping further pressure on Chancellor Rachel Reeves.

- HOLLY WILLIAMS

The Office for National Statistics (ONS) said gross domestic product (GDP) contracted by 0.1% in May, following a 0.3% drop in April.

Most economists had expected the economy to rebound with slight growth of 0.1% in May.

The economy could now be heading for a contraction overall in the second quarter of the year, which would be a blow to Ms Reeves and the UK Government's key priority to drive economic growth.

The pound was weaker after the data, falling 0.2% to $1.36 and 0.1% lower at €1.16.

Ms Reeves said the figures were "disappointing", but renewed her pledge to boost economic growth.

She said: "Getting more money in people's pockets is my number one mission. While today's figures are disappointing, I am determined to kickstart economic growth and deliver on that promise."

If GDP fell by 0.4% or worse in June, it would mean the economy overall contracted in the second quarter.