The UK economy expanded by 0.1% in May, according to the Office for National Statistics (ONS), driven by growth in the UK’s service sector, but offset by falls in the production and construction sectors.
It comes after the economy had contracted slightly in April, when the US-Israel war with Iran began to have an impact on businesses.
In the three months to May, the ONS said the economy grew by 0.7% compared with the previous three-month period. 
Stuart Morrison, Research Manager at the British Chambers of Commerce, said: “The latest ONS data shows a fragile economy weighed down by geopolitical tensions and domestic cost pressures.
“With GDP growing by 0.7% in the three months to May, and only 0.1% in May itself, the new Government faces the same growth challenge as its predecessor.
“The Iran conflict is having real-world consequences for UK firms. Rising energy prices and shipping disruption are increasing costs and creating uncertainty across the economy.
“For most businesses, recent cost rises, including the national insurance hike, are just the tip of the iceberg. BCC analysis shows Government-imposed costs on a typical SME have risen by more than 70% in just 10 years.
“The impact is clear – business confidence is low, and our latest SME survey shows investment plans at their weakest level since the pandemic.
“From the moment Andy Burnham enters Downing Street, he must back business. That means moving quickly to cut the cost of doing business and create opportunities to boost trade, investment and productivity across the economy.”
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