The UK's economy unexpectedly fell for a second month in a row in May. Gross domestic product (GDP) shrank 0.1% in May, following a 0.3 % contraction in April, the Office for National Statistics said in a statement on Friday.

The figures add to challenges faced by Prime Minister Keir Starmer and his Labour government as it battles global uncertainty over US tariffs and inflation.

After fiscal issues caused by its U-turns on welfare cuts and winter fuel payments for millions of pensioners, the government's spending plans depend heavily on economic growth.

UK's finance minister calls news 'disappointing'

UK's Finance Minister Rachel Reeves described the latest GDP figures as "disappointing" and said there is "more to do." She is "determined to kickstart economic growth and deliver on that promise," she said in a statement on Friday.

Labour has pledged to cut red tape and launched a multi-billion pound investment plan focused on the weak National Health Service (NHS) and crumbling infrastructure to boost the economy.

UK's exports to the United States rose by $400 million (€340 million) in May, following a record drop in April when President Donald Trump's tariffs kicked in, data from the Office for National Statistics showed.

ONS director of economic statistics Liz McKeown said that there were "notable falls in production and construction" that impacted GDP in May.

She noted the fall in production was driven by "oil and gas extraction, car manufacturing, and the often-erratic pharmaceutical industry."

Tax breaks and tariff fears fuel UK's early 2025 growth

The UK's economy expanded rapidly in the first quarter of 2025, exceeding growth in other countries in the Group of Seven advanced economies.

However, much of the growth in early 2025 was likely to have been linked to the expiry of a tax break for some home purchases in April, which boosted the sector before the deadline, and a rush by manufacturers to beat higher US import tariffs.

The UK economy appears to be suffering a similar fate to Germany's own sluggish economy. The German government downgraded its growth forecast to zero in April , attributing it to the impact of US President Donald Trump's trade policies.

Edited by: Alex  Berry