DAVY VIEW

This morning’s UK GDP data showing a 0.3% contraction in April is entirely accounted for by the end of the NHS’s test-and-trace activity. However, with both construction (-0.4%) and manufacturing (-1.0%) also contracting, the out-turn will add to fears the UK economy is facing stagnation. Also, the Services PMI at 53.4 points to a sharp slowdown in May as Ofgem’s 54% hike in energy prices started to hit real incomes and demand.