UK economy shrank in May

11 Jul 2025

The UK economy shrank in May, according to latest figures from the Office for National Statistics (ONS).

The economy shrank by 0.1% the second month in a row it has contracted, reported the ONS.

Economists had expected GDP to grow by 0.1%.

The fall in economic output was mainly driven by a drop in production, the ONS said.

Oil and gas extraction was down, while car-making and the pharmaceutical industry were weaker.

The services sector grew overall in May, with legal firms recovering from the impact of changes to stamp duty thresholds the previous month. But retail sales were very weak, added the ONS.

Ben Jones, Lead Economist at the Confederation of British Industry, said: 'Flatlining growth in May highlights the ongoing pressures facing the UK economy, with manufacturing and retail struggling, alongside a patchy performance across other parts of the services sector.

'Today's data suggests that a sluggish recovery remains the likeliest path in the near-term amid persistent trade uncertainty, a loosening labour market and slowing growth in real incomes. And with business costs rising, many firms are maintaining a cautious approach to investment.

'With growing fiscal challenges and the Autumn Budget on the horizon, the Chancellor must provide clear reassurance—no new taxes on business and instead offer a commitment to work alongside firms to dismantle barriers to growth. An open and collaborative partnership between business and government is crucial to deliver the conditions for sustained economic growth.'