The Office for National Statistics (ONS) has released figures showing the UK economy grew by just 0.1% in May, following a 0.1% decline in April. This is a slower rate of growth than economists had predicted, and raises concerns about the country's economic prospects. The Bank of England is likely to keep interest rates on hold, given the fragile economic situation.
The FTSE 100 index has been affected by the gloomy economic outlook, losing 1.5% of its value in the past week. This has implications for UK savers, who may see their investments decline in value. Mortgage holders may also be affected, as interest rates remain low but could increase in the future.
The UK economy is facing a challenging period, with the ONS data suggesting a fragile future. The incoming government, led by Andy Burnham, will need to address these concerns and implement policies to stimulate growth. This will be a key challenge for Burnham's administration in the coming months.
The Bank of England's monetary policy committee (MPC) is likely to keep interest rates at 4.5% for now, given the uncertain economic environment. This will be a relief for households and businesses with variable-rate loans, but may not be enough to stimulate growth in the economy.
UK businesses will be watching the situation closely, as a decline in the economy could lead to reduced demand and lower profits. This has implications for employment and investment in the country.