UK economic growth exceeds forecasts in May, driven by British carmakers
The British economy grew by more than expected in May, supported by stronger car production in the wake of Brexit-related shutdowns, according to data from the Office of National Statistics.
UK economic growth exceeded forecasts in May, spurred on by a resurgence in British car production after Brexit-related shutdowns hurt the sector earlier in the year, according to data from the Office of National Statistics (ONS).
British economic growth grew by 0.3% in May after contracting by 0.4% in April, the ONS said.
‘The economy returned to growth in the month of May, following the fall seen in April. This was mainly due to the partial recovery in car production,’ ONS statistician Rob Kent-Smith said.
British carmakers prop up ailing UK economy
British carmakers initiated their summer shutdowns early in April to minimise the impact of Brexit on its the original March 29 deadline only for it to be pushed back to October 31.
Despite the Brexit shambles, however, British carmakers output rebounded significantly in May, helping to improve growth and ease investors concerns about the pace of the country’s economic slowdown.
In fact, output in the three months to May ended up being 0.3% higher than in the previous three-month period, exceeding forecasts for growth of 0.1%
Bank of England feared UK economy would flatline in Q2
The Bank of England (BoE) had raised concerns that global trade tensions, particularly between the US and China, combined with Brexit uncertainty, would spell disaster for the UK economy.
Last month, the BoE said that it expected economic growth to flatline during in the second quarter (Q2) of the year, after the UK recorded 0.5% growth in the previous quarter.
However, data from the ONS suggests that the UK economy could expand slightly in Q2, despite contracting by 0.4% in April.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
See an opportunity to trade?
Go long or short on more than 17,000 markets with IG.
Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
