UK economy rebounds as nation awaits new prime minister

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United Kingdom

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Britain’s economy rebounded slightly in May with growth of 0.1 percent thanks to expansion in the services sector, official data showed Thursday as Britain awaits a new prime minister.

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Gross domestic product (GDP) had contracted by 0.1 percent in April as the US-Iran war pushed up inflation after oil prices soared.

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“The growth in May was because of a rise of 0.3-percent (output) in services,” the Office for National Statistics said in a statement.

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The data comes as Andy Burnham prepares to take over as prime minister on Monday. Keir Starmer resigned as PM and Labour party leader last month, bowing to months of internal pressure to step down after a series of scandals, missteps over the economy and policy U-turns.

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The latest data “is not a bad welcome gift for incoming PM Andy Burnham”, noted Paul Dales, chief UK economist at Capital Economics research group.

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He added that even if output proves to be flat in June, the economy would have expanded by 0.4 percent overall in the second quarter.

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“This suggests that the economy has been more resilient to the rise in energy prices” than expected, Dales said.

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The OECD grouping of industrialised nations on Wednesday forecast that the UK economy was expected to slow to growth of 0.9 percent this year from 1.4 percent in 2025, before GDP output picks up to 1.1 percent next year.

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AFP

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