UK Economy Contracts Again: Reeves Calls GDP Figures ‘Disappointing’

LONDON, July 11, 2025 

The UK economy has shrunk for the second consecutive month, prompting concern among economists and strong reaction from Chancellor of the Exchequer Rachel Reeves, who labelled the latest GDP data “disappointing.”

New figures released by the Office for National Statistics show that gross domestic product declined by 0.1% in May, following a 0.3% contraction in April. The back-to-back declines raise fears that the UK could be edging toward a mild recession unless economic momentum picks up in the second half of the year.

Manufacturing and construction sectors were particularly weak, with pharmaceutical output and car manufacturing seeing sharp declines. The North Sea oil and gas sector also contributed to the contraction amid maintenance shutdowns.

“This is a stark reminder of the economic challenges we inherited,” said Reeves. “We must rebuild Britain’s foundations with a new economic strategy that delivers sustained growth.”

Experts suggest that these weak GDP readings could lead the Bank of England to consider a rate cut in its August meeting, especially as inflation continues to ease. However, uncertainty remains, with global market volatility and domestic productivity issues still posing risks.

Despite the contraction, some economists are optimistic that this downturn could be short-lived if government policies stimulate investment and if consumer confidence improves over the summer.