DAVY VIEW

May’s result for gross domestic product (GDP) in the UK was stronger than expected, expanding by 0.1% compared to April whereas the consensus expectation was for no change. However, the details show that the result was not broadly based, with many sectors declining and more energy-exposed parts of the economy such as construction and industrial production particularly weak. Services overall registered strong growth, but mainly down to professional services which had an outsized increase. The underlying position looks weaker than May’s 1.3% annual growth rate; downside risks remain for our GDP forecast in 2026 of 0.9%.