Investing.com - The UK economy grew at a solid pace in May, according to data released on Tuesday, likely keeping the Bank of England on track for an interest rate hike at its upcoming August meeting.
The Office of National Statistics said the economy grew 0.3% month-on-month in May, recovering from a sharp slowdown at the start of the year, where growth was just 0.2% in the three months to March.
The rolling three-month estimate showed that the economy grew 0.2% in the three months to May, reflecting the slower growth from the earlier months.
The ONS said the report painted a mixed picture of the economy with modest growth driven by the services sector, partly offset by falling construction and industrial output.
The service industries expanded 0.4% in the three months to May, the largest contributor to GDP growth, but contraction in the production and construction industries meant that they each had negative contributions to GDP.
"Retailing, computer programming and legal services all performed strongly in the three months to May while housebuilding and manufacturing both contracted," ONS statistician Rob Kent-Smith said.
“Services, in particular, grew robustly in May with retailers enjoying a double boost from the warm weather and the royal wedding. Construction also saw a return to growth after a weak couple of months."
It is the first time that the ONS released monthly economic growth figures and a rolling three-month figure, instead of a quarterly figure.
Under the new model, the GDP report will contain a significantly higher amount of data and allow for quicker estimates of growth, but it will be volatile and subject to revision.
The pound was little changed against the dollar for the day following the report, with GBP/USD last at 1.3257 rising as high as 1.3301 earlier.
Sterling was higher against the euro, with EUR/GBP sliding 0.15% to 0.8849.