LONDON, United Kingdom – The City of London, home to the primary central business district of London, saw a 0.4% growth in the UK economy in May, according to flash figures from the Office for National Statistics. The British pound also surged to a four-month high against the US dollar following the announcement, exceeding the 0.2% monthly expansion predicted by economists in a Reuters poll.
After coming out of a shallow recession in the first quarter of the year, the British economy experienced a stagnant phase in April. However, in May, the services sector showed growth of 0.3%, with both production and construction sectors bouncing back with 0.2% and 1.9% increases, respectively. This broad-based recovery is a positive sign for the newly-elected Labour Party, led by Prime Minister Keir Starmer, who is starting his first week in office.
Analysts have noted the positive impact of the Labour Party’s business-friendly approach on the economy, with Goldman Sachs recently upgrading its growth forecast for the UK following the party’s victory in the general election. The government’s focus on economic growth, housing, and planning has garnered support from various sectors, leading to an optimistic outlook for UK assets.
The rise in GDP and the strengthening of the pound against the dollar indicate a positive shift in the UK economy, with hopes for sustained growth in the coming months. As the country navigates through post-election changes, the focus remains on maintaining this upward trajectory and ensuring a stable economic environment for businesses and citizens alike.