Britain’s economy slid back into contraction in May, official data show, as the extra bank holiday for the Coronation impacted growth.

Gross domestic product (GDP) fell by 0.1pc, according to the Office for National Statistics, having grown by 0.2pc in April.

This was less than the 0.3pc contraction economists had expected following rail and school strikes and the extra bank holiday to mark the Coronation of the King.

Businesses in the arts, entertainment and recreation sector reported growth of 1.8pc, while manufacturing and construction reported slumps in activity.

Chancellor of the Exchequer, Jeremy Hunt said: “While an extra Bank Holiday had an impact on growth in May, high inflation remains a drag anchor on economic growth.

“The best way to get growth going again and ease the pressure on families is to bring inflation down as quickly as possible.” 

However, there are concerns about the risk of recession in Britain, as record increases in wages put pressure on the Bank of England to increase interest rates higher for longer.

The UK narrowly avoided a recession at the start of 2023 and economists have since upgraded their predictions thanks to better than expected consumer spending.

Britain’s economy remains smaller than its pre-crisis size, however.

The International Monetary Fund (IMF) warned that interest rates would likely have to go even higher if inflation, which remains at 8.7pc, remained stubborn.

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