UK GDP Falls 0.1% in May Amid Rising Trade Deficit

The United Kingdom's economy contracted for the second consecutive month in May, with GDP falling 0.1% despite economists' expectations of growth. This decline was driven by significant drops in the production and construction sectors, although the services sector showed some growth. The economic downturn followed a 0.3% contraction in April, a period marked by tariffs imposed by U.S. President Donald Trump, which have since been paused, allowing some normalization in trade. Exports to the United States increased slightly but remained low overall, while imports rose and exports fell, contributing to a disappointing trade balance. Chancellor Rachel Reeves expressed determination to revive economic growth, highlighting that the economy still showed growth when looking at the quarter as a whole, partly due to businesses accelerating activity ahead of tariffs. Investors are anticipating an interest rate cut in August as part of efforts to stimulate the economy.