UK economic downturn deepens

The UK’s Office for National Statistics (ONS) announced today, Friday (July 11, 2025), that the country's Gross Domestic Product (GDP) shrank by 0.1% in May. This decline follows a 0.3% contraction in April. Analysts had expected a slight rebound in May, but the actual data pointed in the opposite direction.

According to the ONS report, the main drivers of the economic downturn were contractions in the industrial and construction sectors. Manufacturing output fell by 0.9%, and the construction sector saw a 0.6% decline. Meanwhile, the services sector posted a modest growth of just 0.1%—not enough to offset the broader economic slowdown.

UK Chancellor of the Exchequer Rachel Reeves called the figures "disappointing" but insisted the government remains determined to restart economic growth and improve people's living standards.

However, economic institutions warn that the continued slowdown may strain public finances and delay the implementation of the government's pledged projects.

Hayley Low, senior economist at the UK’s National Institute of Economic and Social Research (NIESR), commented on the latest data: "The growth outlook remains fragile. The government faces a tough autumn budget—either it must raise taxes or cut spending to stay within its fiscal rules."

Given these developments, the Labour government—despite its promises and initial efforts to revive growth—is already facing the harsh and complex realities of the UK economy in its first year in office.

An economy burdened not only by structural challenges and longstanding deficiencies in production, investment, and social welfare, but also by the heavy fallout from external shocks such as the U.S. tariff war, geopolitical pressures, and volatile global markets.

In such an environment, fulfilling the government’s economic promises faces serious obstacles, and hopes for a recovery remain clouded by uncertainty.