The UK economy grew quicker than expected in May as more shoppers returned to high streets and construction work recovered, according to official data.

The Office for National Statistics (ONS) said gross domestic product (GDP) increased by 0.4% in May.

It came after no growth was recorded in April when damp weather hit consumer spending.

Economists had predicted that GDP would increase by 0.2% in May.

ONS director of economic statistics Liz McKeown said: “The economy grew strongly in May, with all the main sectors seeing increases.

“Many retailers and wholesalers had a good month, with both bouncing back from a weak April.

“Construction grew at its fastest rate in almost a year after recent weakness, with housebuilding and infrastructure projects boosting the industry.”

(PA Graphics)

The services sector remained a key driver for economic growth across the UK, the ONS said, with its fifth consecutive monthly increase.

Retailers had a particularly strong month, reporting a 2.9% increase in trade for May as they rebounded from a 1.8% decline the previous month in the face of poor weather.

Accommodation and food services, which includes hotels and restaurants, was another strong performer, with 2.4% growth.

Elsewhere, the construction industry saw output grow by 1.9%, with an increase in both new work and maintenance.

Despite the rebound, the sector still contracted over the three months to May as it continues to face pressure from high interest rates.

The stronger-than-expected performance in May puts the country’s economy on track to surpass the Bank of England’s projection of 0.5% growth for the second quarter, barring a notable decline in June.

It would represent an early boost for the new Government, which is looking for economic growth and thus higher tax revenues to help fund its spending plans.

Chancellor Rachel Reeves said: “Delivering economic growth is our national mission, and we don’t have a minute to waste.”

The figures come after a 0.6% increase in the first quarter of 2024, having rebounded from a shallow recession in the latter half of 2023.

Rob Wood, chief UK economist at Pantheon Macroeconomics, said: “The UK economy is well and truly putting last year’s minor recession behind it.

“GDP has risen 1.5% so far this year, and three-month-on-three-month growth reached the highest since January 2022.

“But these growth numbers feel a bit too good to be true – they are much stronger than business surveys – so we assume some payback in June.”