City of London skyline on 10th June 2024 in London, United Kingdom. The City of London is a city, ceremonial county and local government district that contains the primary central business district CBD of London. The City of London is widely referred to simply as the City is also colloquially known as the Square Mile.
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LONDON — The U.K. economy grew by 0.4% in May, flash figures published by the Office for National Statistics showed on Thursday, with the British pound jumping to a four-month high against the U.S. dollar after the announcement.
Gross domestic product came in above the 0.2% monthly expansion forecast by a Reuters poll of economists.
The British economy exited a shallow recession in the first quarter of the year, then flatlined in April.
The nation’s dominant services sector showed continued growth of 0.3% in May, as output in both production and construction rebounded from losses, rising by 0.2% and 1.9%, respectively.
Sterling was 0.05% higher against the U.S. dollar at $1.2859 by 7:17 a.m. in London — the highest level for the British currency since March 8, 2024, according to LSEG data.
The broad-based recovery will be welcomed by the newly-elected Labour Party, as Prime Minister Keir Starmer undertakes his first week on the job.
Goldman Sachs last week upgraded its growth forecast for the U.K. following left-of-center Labour’s thumping victory in the country’s general election. The party campaigned on a platform that centered on boosting economic growth, housing and planning.
The party’s large parliamentary majority and business-friendly messaging have led analysts to describe the government as generally supportive of U.K. assets.
This is a breaking news story and will be updated shortly.