UK Economy Contracts Amid Tariff and Tax Pressures

The UK economy faces mounting challenges as GDP shrinks for two consecutive months, defying earlier growth forecasts. A 0.1% contraction in May follows April's 0.3% decline, signaling potential stagnation risks. Construction and manufacturing sectors bear the brunt, with output plunging to NEAR one-year lows.

US tariffs under the 'Liberation Day' policy continue to disrupt trade flows. Manufacturers' pre-deadline stockpiling artificially inflated Q1 figures, leaving factories idle as demand evaporates. Export declines compound domestic pressures, with May's £0.3 billion trade growth failing to offset broader weaknesses.

Consumer spending retrenches amid the dual shock of rising taxes and trade barriers. The ONS data paints a stark contrast to Bloomberg economists' projections of 0.1% May growth, raising alarms about the economy's direction just months after posting positive quarterly results.