According to the ONS, the UK economy showed a growth of 0.2% in April 2023, from a drop of 0.3% the prior month and in line with market expectations. Production and construction sectors both contracted in April 2023, by 0.3% and 0.6% respectively, while the services sector grew by 0.3%.
The cost-of-living crisis in the UK continues to persist. On Wednesday, the Office for National Statistics (ONS) released UK inflation data. Headline CPI was 8.7% in May 2023, unchanged from the previous month and above market forecasts of 8.4%. Core CPI rose unexpectedly to 7.1% in May 2023, from 6.8% in April and the highest since March 1992.
Inflation remained significantly above the Bank of England’s 2% target. In its fight against sticky inflation, today the Monetary Policy Committee (MPC) raised interest rates by 50 basis points, higher than market expectations of 25 bps. This marked the thirteenth consecutive rate hike, bringing the Bank Rate to 5% in June 2023.