Although the tax increases and tariffs continue to hamper growth, a modest 0.1% expansion was expected by City economists but the Office for National Statistics (ONS) has announced that the economy contracted 0.1% in May. Adding to a bruising few weeks, the new ONS figures indicate that the Chancellor’s growth mission is still lagging.

The contraction was largely driven by a 0.9% fall in production output. Construction was reported to be down 0.6%, while services showed 0.1% growth. In April, production fell by 0.6%, construction grew 0.8%, and services dropped 0.3%.

“The economy contracted slightly in May with notable falls in production and construction only partly offset by growth in services. May’s fall in production was driven by oil and gas extraction, car manufacturing and the often-erratic pharmaceutical industry,” explained Liz McKeown, ONS Director Economic Statistics.