UK economy posts modest growth in May on stronger retail sales

The UK economy recorded modest growth in May 2026, supported by stronger retail sales driven by a pre-summer heatwave and improved activity in other consumer-facing sectors. The improvement did not appear broad-based, with the sectoral picture described as mixed and the economy still struggling to build sustained momentum. Ben Jones, senior lead economist, CBI said, "The economy managed to eke out modest growth in May. The pre-summer heatwave supported retail sales and probably provided a boost to some other consumer-facing sectors as well. But the broader sectoral picture was mixed, suggesting that the UK continues to struggle to build sustained momentum." Jones said businesses remain cautious about the outlook for the rest of the year, as uncertainty over the policy outlook and the Autumn Budget, alongside a looming change in government, is likely to weigh on confidence and investment decisions. He also pointed to renewed military strikes in the Middle East as a risk for further volatility in global energy and financial markets. CBI's own business surveys weakened in May and softened further in June, with private sector activity expected to remain subdued over the coming months, Jones said. For retail-linked supply chains, the assessment indicates that weather-supported demand has not removed wider caution around trading conditions. With a new Prime Minister taking office, Jones said the government must restore the UK's competitiveness by addressing rising business costs, including reducing industrial electricity prices. He noted that the UK's industrial electricity costs are currently 45 per cent higher than the G7 median and argued that lowering these costs would give businesses the confidence to invest and support stronger economic growth across the country. Fibre2Fashion News Desk