AssetID: 54911955
Headline: UNCAPTIONED: UK Economy Contracts for Second Consecutive Month, Raising Concerns for Future Growth
Caption: UK Economy Contracts for Second Consecutive Month, Raising Concerns for Future Growth. The UK economy unexpectedly shrank by 0.1% in May, marking a second consecutive monthly contraction and raising concerns over the country's economic outlook. Economists had forecast a modest 0.1% growth, but declines in industrial output and construction overpowered growth in the services sector. The figures add to the uncertainty surrounding the country's recovery, following a surge in early 2025 that now seems unsustainable. The latest data suggests that the Bank of England may need to cut interest rates in August, despite inflation concerns, according to economists. Prime Minister Keir Starmer's Labour government has struggled to stimulate significant growth during its first year in office. Finance Minister Rachel Reeves faces increased pressure, with economists predicting potential tax hikes in her next budget to address the budget deficit. While the economy expanded rapidly in the first quarter of 2025, much of the growth was driven by temporary factors, including a rush to beat the expiry of a tax break. The UK's economic struggles have raised fears that the government’s growth plan is being derailed by both domestic and external shocks, according to experts. S&P Global Market Intelligence warned that the second consecutive decline in monthly GDP could signal more serious economic challenges ahead. Instructions: THIS VIDEO MUST NOT BE EDITED FOR LENGTH TO COMBINE WITH OTHER CONTENT
Keywords: Current Affairs & Politics,UK economy,GDP contraction,Rachel Reeves,Bank of England,interest rates,economic growth,industrial output,construction,fiscal policy
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