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UK economic growth May 2024

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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 0.14% higher against the U.S. dollar at $1.2863 by 8:30 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.

In a note, Ashley Webb, U.K. economist at Capital Economics, underlined the recent trend of British GDP increases in recent months — barring the lack of growth in April — “which supports the idea that the dual drags on activity from higher interest rates and higher inflation are starting to fade.”

Price rises in the U.K. have cooled from a 41-year high of 11.1% in October 2022, all the way down to the Bank of England’s 2% target in May this year. The performance has raised expectations for a coming interest rate cut from the Bank of England.

However, the BOE continued to strike a cautious tone at its June meeting even after its peers at the European Central Bank began their own path of interest rate cuts, warning that key indicators of inflation persistence in the U.K. “remained elevated.” Markets remain roughly evenly split on the prospect of a cut at its August meeting.

Labour agenda

It will now be up to the new government to build momentum behind the latest economic growth figures, Muniya Barua, deputy chief executive at industry campaign group BusinessLDN, said in emailed comments.

“With the public finances stretched, ministers should follow its flurry of recent pro-growth announcements by prioritising high-impact, low-cost measures which taken together could help unlock much-needed private investment,” Barua said, citing an overhaul of the apprenticeship system and scrapping stamp duty on share transactions.

New Finance Minister Rachel Reeves last week said Labour would introduce mandatory house-building targets, lift the ban on new onshore wind farms in England and reform planning rules. On Wednesday she announced the launch of a £7.3 billion ($9.4 billion) national wealth fund targeted at attracting private sector investment in U.K. infrastructure projects.

The business community now awaits Labour’s first fiscal statement, which is expected no earlier than mid-September, Lindsay James, investment strategist at Quilter Investors, said in a note.

This “should make both taxation and spending plans clearer. This will allow businesses to better plan ahead and could in turn reinvigorate their want to invest,” James said.

“However, this would take time to feed through, and until there is a better understanding of what is to come, we are unlikely to see any meaningful acceleration in GDP growth,” she added.

Economics

Consumer sentiment worsens as inflation fears grow, University of Michigan survey shows

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A shopper pays with a credit card at the farmer’s market in San Francisco, California, US, on Thursday, March 27, 2025. 

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The deterioration in consumer sentiment was even worse than anticipated in March as worries over inflation intensified, according to a University of Michigan survey released Friday.

The final version of the university’s closely watched Survey of Consumers showed a reading of 57.0 for the month, down 11.9% from February and 28.2% from a year ago. Economists surveyed by Dow Jones had been expecting 57.9, which was the mid-month level.

It was the third consecutive decrease and stretched across party lines and income groups, survey director Joanne Hsu said.

“Consumers continue to worry about the potential for pain amid ongoing economic policy developments,” she said.

In addition to worries about the current state of affairs, the survey’s index of consumer expectations tumbled to 52.6, down 17.8% from a month ago and 32% for the same period in 2024.

Inflation fears drove much of the downturn. Respondents expect inflation a year from now to run at a 5% rate, up 0.1 percentage point from the mid-month reading and a 0.7 percentage point acceleration from February. At the five-year horizon, the outlook now is for 4.1%, the first time the survey has had a reading above 4% since February 1993.

Economists worry that President Donald Trump’s tariff plans will spur more inflation, possibly curtailing the Federal Reserve from further interest rate cuts.

The report came the same day that the Commerce Department said the core inflation rate increased to 2.8% in February, after a 0.4% monthly gain that was the biggest move since January 2024.

The latest results also reflect worries over the labor market, with the level of consumers expecting the unemployment rate to rise at the highest level since 2009.

Stocks took a hit after the university’s survey was released, with the Dow Jones Industrial Average trading more than 500 points lower.

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Economics

PCE inflation February 2025:

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Core inflation in February hits 2.8%, hotter than expected; spending increases 0.4%

The Federal Reserve’s key inflation measure rose more than expected in February while consumer spending also posted a smaller than projected increase, the Commerce Department reported Friday.

The core personal consumption expenditures price index showed a 0.4% increase for the month, putting the 12-month inflation rate at 2.8%. Economists surveyed by Dow Jones had been looking for respective numbers of 0.3% and and 2.7%.

Core inflation excludes volatile food and energy prices and is generally considered a better indicator of long-term inflation trends.

In the all-items measure, the price index rose 0.3% on the month and 2.5% from a year ago, both in line with forecasts.

At the same time, the Bureau of Economic Analysis report showed that consumer spending accelerated 0.4% for the month, below the 0.5% forecast. That came as personal income posted a 0.8% rise, against the estimate for 0.4%.

Stock market futures moved lower following the release as did Treasury yields.

Federal Reserve officials focus on the PCE inflation reading as they consider it a broader measure that also adjusts for changes in consumer behavior and places less of an emphasis on housing than the Labor Department’s consumer price index. Shelter costs have been one of the stickier elements of inflation and rose 0.3% in the PCE measure.

“It looks like a ‘wait-and-see’ Fed still has more waiting to do,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. “Today’s higher-than-expected inflation reading wasn’t exceptionally hot, but it isn’t going to speed up the Fed’s timeline for cutting interest rates, especially given the uncertainty surrounding tariffs.”

Good prices increased 0.2%, led by recreational goods and vehicles, which increased 0.5%. Gasoline offset some of the increase, with the category falling by 0.8%. Services prices were up 0.4%.

The report comes with markets on edge that President Donald Trump’s tariff intentions will aggravate inflation at a time when the data was making slow but steady progress back to the Fed’s 2% goal.

After cutting rates a full percentage point in 2024, the central bank has been on hold this year, with officials of late expressing concern over the impact the import duties will have on prices. Economists tends to consider tariffs as one-off events that don’t feed through to longer-lasting inflation pressures, but the encompassing scope of Trump’s tariffs and the potential for an aggressive global trade war are changing the stakes.

Correction: Consumer spending increased 0.4% in February. An earlier headline misstated the number.

This is breaking news. Please refresh for updates.

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Economics

Young Americans are losing confidence in economy, and it shows online

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For economists, harbingers of a recession can include a slowdown in consumer spending and rising unemployment.

For the chronically online, indicators can range from the perceived fall of fake eyelashes to more commercials for online colleges. Or, maybe, it’s a skin care company selling eggs.

And for Sydney Brams, a Miami-based influencer and realtor, it’s a decline in prices on clothing resale platform Depop.

“I was literally running to my parents and my boyfriend, and I’m like, ‘Look at this. Look, something is very wrong,'” Brams told CNBC after seeing some Depop sellers “come back to Earth,” as she described it. “I feel like Chicken Little.”

Making a joke of so-called recession indicators in everyday life has gained traction in recent weeks as the stock market pullback and weak economic data raised anxiety around the health of the economy. This trend also underscores the uniquely sharp sense of financial dissatisfaction among America’s young adults.

Read more CNBC analysis on culture and the economy

Many of today’s young adults experienced childhood during the Great Recession and came of age as the pandemic threw everything from in-person work to global supply chains out of orbit. Now, they’re concerned about what’s been deemed a white-collar job market slowdown and President Donald Trump’s on-again-off-again tariff policies — the latter of which has battered financial markets in recent weeks.

To be clear, when they share their favorite recession indicators, they’re kidding — but they don’t see the future path of the U.S. economy as a laughing matter.

“It’s gallows humor,” said James Cohen, a digital culture expert and assistant professor of media studies at Queens College in New York. “This is very much a coping mechanism.”

These omens can be found across popular social media platforms such as X, TikTok and Instagram. Some users see cultural preludes to a recession in, say, Lady Gaga releasing her latest album or the quality of the new season of HBO’s “The White Lotus.” Others chalk up social trends such as learning to play the harmonica or wearing more brown clothing as forewarnings of a financial downturn on the horizon.

Social media users Sydney Michelle (@sydneybmichelle), left; Celeste in DC (@celesteiacevedo), and Sulisa (@ssclosefriendstory) share their personal “recession indicators” on TikTok.

Courtesy: Sydney Michelle | Celeste in DC | Sulisa | via TikTok

Just last week, several social media users saw a slam-dunk opportunity to employ variations of the joke when DoorDash announced a partnership with Klarna for users to finance food delivery orders. A spokesperson for Klarna acknowledged to NBC News that people needing to pay for meals on credit is “a bad indicator for society.”

Some content creators have made the humor an entry point to share budget-friendly alternatives for everyday luxuries that may have to go if wallets are stretched.

“We are heading into a recession. You need to learn how to do your nails at home,” TikTok user Celeste in DC (@celesteiacevedo) said in a video explaining how to use press-on nail kits as opposed to splurging at a salon.

Declining confidence

These jokes don’t exist in a vacuum. Closely followed data illustrates how this trend reflects a growing malaise among young people when it comes to the economy.

At the start of 2024, 18-to-34-year-olds had the highest consumer sentiment reading of any age group tracked by the University of Michigan. The index of this group’s attitude toward the economy has since declined more than 6%, despite the other age cohorts’ ticking higher.

This switch is particularly notable given that young people have historically had stronger readings than their older counterparts, according to Joanne Hsu, director of the Surveys of Consumers at Michigan.

A typically cheerier outlook can be explained by younger people being less likely to have additional financial responsibilities, such as children, Hsu said. But she added that this age bracket is likely grappling with rising housing costs and debt right now, while also feeling uncertainty tied to economic policy under the new White House.

“I have a suspicion that young people are starting to feel like — or have been feeling like — many markers of the American dream are much more difficult to reach now,” Hsu said.

Young people are also less likely to have assets such as property or investments that can buoy financial spirits when the economy flashes warning signs, according to Camelia Kuhnen, a finance professor at the University of North Carolina.

The potential for a recession, which is broadly defined as at least two consecutive quarters of the national economy contracting, has been on the minds of both Wall Street and Main Street. A Deutsche Bank survey conducted March 17-20 found the average global market strategist saw a nearly 43% chance of a recession over the next 12 months.

An index of consumer expectations for the future released Tuesday by the Conference Board slid to its lowest level in 12 years, falling well below the threshold that signals a recession ahead. Meanwhile, Google searches in March for the word “recession” hit highs not seen since 2022.

This onslaught of news comes after Treasury Secretary Scott Bessent said on March 16 that there were “no guarantees” the U.S. would avoid a recession. Bessent said a “detox” period is needed for the national economy, which he and other Trump administration officials have argued is too reliant on government spending.

‘The vibes are off’

Though the recession humor has had a yearslong history online, it’s gained momentum in recent weeks as the state of the economy has become a more common talking point, according to Cohen, the Queens College professor. While a recession indicator entry was added to the digital culture encyclopedia Know Your Meme only this month, the jokes have tracked back to at least 2019.

“Especially with Gen Z, there’s a lot of jokes with never being in a stable economic environment,” said Max Rosenzweig, a 24-year-old user experience researcher whose personal recession indicator was the number of people he’s seen wearing berets. “It’s funny, but it’s like, we’re making light of something that is scary.”

Cohen said he heard from Gen Z students that this type of humor helped them realize others are experiencing the same uncertainty. These students may not feel control over the country’s economic standing, he said, but they can at least find community and levity in a precarious moment.

Cohen sees the recent surge of this humor as a sort of “barometer” for what he calls the vibes around the economy. His conclusion: “The vibes are off.”

Brams sees a similar story playing out in South Florida and on social media. “I’m not going to lie, it just feels really grim,” the 26-year-old said.

But, “it’s not anything that me or my friend or my boyfriend or my parents can really do anything about,” she said. “There’s no choice but to just stay in your lane, try to keep your job, try to find joy where you can and just stay afloat.”

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