Commenting on ONS data that showed monthly GDP falling by 0.1% in May 2023, Kitty Ussher, Chief Economist at the Institute of Directors, said:

“The slight fall in monthly GDP is driven by lower output in the production sector, possibly driven by the extra bank holiday for the King’s coronation reducing manufacturing output. This was partly offset by higher leisure spending.

“The ONS GDP data for May is consistent with our own survey data that shows confidence flatlining in May after growth in the earlier part of the year.

“Looking at the detail, a large 3.5% monthly fall in ‘employment activities’ within the service sector is further evidence that the labour market is now cooling, leading to lower demand for the services offered by recruitment companies.

“Perhaps perversely the Bank of England may take some comfort from this weaker output data, as it suggests demand may be cooling, which in turn reduces inflationary pressure.”