Low growth highlights need for reform

Commenting on GDP figures showing that the UK economy contracted in May, Economics Fellow at the free market think tank, the Institute of Economic Affairs Julian Jessop, said:

“The 0.1 per cent fall in economic activity in May was not as big as feared, given the hit from the extra Bank Holiday, but the bigger picture remains weak. There was no growth in the three months to May and monthly GDP is just 0.2 per cent above its pre-COVID level.

“The UK is at least dodging the sharp recession that many were predicting last year, helped by the continued strength of the labour market. But this could simply encourage the Bank of England to raise interest rates further, increasing the risk of overkill.

“Economic policy needs a reboot with a clear plan for growth, based on structural reforms that boost productivity. This means fixing our broken planning system, cutting burdensome red tape across the economy, and lower and simpler taxes.”