(Reuters) – The British economy has contracted unexpectedly for the second consecutive month in May, according to figures from the National Statistics Office published on Friday, adding to the concerns of the British Finance Minister Rachel Reeves.

The gross domestic product (GDP) fell 0.1% after a drop of 0.3% in April. Economists interviewed by Reuters tapped on average on an expansion of 0.1% of the gross domestic product (GDP).

While the service sector has recorded slight growth, the decline in industrial production and construction has weighed on total production.

Rachel Reeves described the latest GDP figures on Friday. “Even if the current figures are disappointing, I am determined to revive economic growth and to keep this promise,” she said in a statement.

These figures show risks on economic growth forecasts for the second quarter of 2025, after a sharp increase at the start of the year. They strengthen anticipations of a drop in interest rates by the Bank of England (BOE) next month.

“The lack of dynamism of the British economy, illustrated by these gloomy figures, means that a drop in interest rates in August now seems inevitable, despite the recent outbreak of inflation,” said Souren Thiru, economic director of the ICAEW accounting organization.

The British economy experienced rapid growth in the first quarter of 2025, surpassing that of other G7 countries. In May, the BOE revised its growth forecasts for the whole year, at 1%.

However, a large part of the growth recorded in early 2025 was probably linked to the expiration, in April, of a tax relief on certain real estate purchases, which had stimulated the sector before the deadline, as well as to the manufacturers’ rush to be ahead of the increase in American customs duties.

The BOE said it estimated that the economy had increased by approximately 0.25% in the second quarter of 2025.

According to the Office of National Statistics, to record growth during the quarter, the monthly data in June should at least remain stable, assuming that no revision is brought to the previous months.

A contraction of 0.4% or more in June would lead to a quarterly contraction.

“The second consecutive drop in real monthly GDP in May will strengthen concerns about the fact that the government’s growth plan has been derailed by external and internal shocks,” said Raj Badiani, economic director for Europe at S&P Global Market Intelligence.

(Andy Bruce, William James, Mara Vîlcu for the , edited by Augustin Turpin)

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