- UK GDP grew by 0.5% in May 2022, after a decline of 0.2% in April.
- New figures potentially allay fears the UK is widely expected to experience a technical recession in the second half of the year.
- FTSE100 tipped to retreat slightly as US inflation data is in the spotlight today.
- Twitter sues Elon Musk for backing out of takeover.
Sophie Lund-Yates, Lead Equity Analyst at Hargreaves Lansdown:
“UK GDP grew by 0.5% in May 2022, after a decline of 0.2% in April, after fears the data set would show no growth. The services sector was to thank for the majority of the increase, with a particular emphasis on human health and social work activities. It appears a surge in GP appointments has aided the UK economy this time around, helping to prop up health service activity, despite a huge drop in test and trace vaccinations. Elsewhere in Services, the repair of motor vehicles and motorcycles fell by 0.8%.
There was proof that the UK consumer base is on shaky ground, with consumer-facing services like retail trade, food and beverage, travel and transport, and entertainment and recreation, seeing output fall 0.1%. Consumer-facing services were 4.7% below pre-Covid levels.
While it’s positive to see a small nudge upwards in overall GDP, these figures are hardly shooting the lights out. It will take something strong to fully reverse fears the UK’s heading towards a recession in the coming year. Frankly, until there is a clear path out from political turmoil, the energy crisis, cost-of-living squeeze and the UK’s far-reaching productivity problems, it’s hard to see where the economy will find its take-off point.
The FTSE 100 is expected to remain sensitive to news coming from the US, with the latest inflation data due. It’s not widely expected this will be a number to celebrate, and jitters around the federal reserve’s willingness to stoke the fires of interest rate hikes will be far-reaching. Further soaring inflation gives policymakers the power to do just that.
The latest twist in the Elon Musk Twitter saga is here. Twitter is suing billionaire Musk to try to force him to buy the social media firm. The world is gripped by news of the world’s richest man being hauled into such public legal proceedings. The drama comes after Mr Musk announced he was walking away from his proposed $44bn (£37bn) takeover of Twitter on Friday. The eventual outcome of such a case is anyone’s guess, with the story so far not following any rules. One thing’s for sure though – Elon Musk’s immense resources means he will have the ability to throw a lot at fighting the case.”
