UK Economy Contracts 0.1% in May Due to Coronation of King Charles, with No Sector Seeing Growth

The extra public holiday for the coronation resulted in negative growth, although it was better than expected and less severe than the yo-yo pattern of growth seen throughout the last year, which has left GDP flat on a quarterly basis.

Services, which account for 80% of UK output, were flat, and no major sector of the economy saw growth.

The hospitality sector failed to capitalise on the coronation, as sales were down on the previous month.

Additionally, pubs and bars saw sales fall after a strong April, and employment agencies also had another poor month.

Despite the coronation bank holiday, the pensions system saw some technical changes that could improve financial outcomes in decades to come.

However, there is no immediate feel-good factor from the changes.

Pension reforms could improve financial outcomes in decades to come, but there's no immediate feel-good factor from the changes.

Meanwhile, the UK is now the only country in the G7 with rising inflation, and the economy is back at risk of recession as the Bank of England bears down harder on stubborn inflation.

The government has said it would welcome the prospect of a recession if it meant the problem could be brought under control.

Rising interest rate expectations on the back of these effects have driven two-year fixed rate mortgage costs to 15-year highs this week.

The Bank of England's latest analysis of the financial system's health showed that millions are at risk of paying an extra £500 per month on their mortgage by the end of 2026, with just shy of one million facing the prospect of bills above that sum.

Chancellor Jeremy Hunt said that while the extra bank holiday had an impact on growth in May, high inflation remains a drag on economic growth.

He added that the best way to get growth going again and ease the pressure on families is to bring inflation down as quickly as possible.

The government has announced some technical changes to the pensions system that could improve financial outcomes in decades to come.

However, there is no immediate feel-good factor from the changes.

According to recent data, the UK economy is experiencing another period of slow growth, with families facing financial struggles and the effects of the Tory government's mortgage policies being felt across the country.

In response, Labour party leader Jeremy Corbyn has pledged to restore financial stability and stimulate economic growth, allowing the country to seize the opportunities of the future that it deserves.