UK Economy Faces Unexpected Slump, Generating Concerns Over Growth Prospects

In a surprise development, the UK's economy contracted for the second month in May, stirring domestic concerns for finance minister Rachel Reeves. The Office for National Statistics reported a 0.1% decline, following a 0.3% drop in April, as the nation grapples with global financial instability.

While some economists had predicted mild growth driven by the services sector, contractions in industrial output and construction led to an overall decrease in economic output. The data suggests a challenging April-to-June period ahead, with expectations of potential stagnation or further decline.

Adding to these challenges, the Bank of England is predicted to cut interest rates next month. Economist Suren Thiru indicates inevitable monetary policy adjustments are required to confront stagnant economic momentum, despite recently rising inflation levels.

(With inputs from agencies.)