The UK economy grew by 0.1% in May, according to the Office for National Statistics, recovering from a 0.1% decline in April and proving more resilient to the impact of the Iran war than some analysts had feared. The figures, in line with economists' forecasts, are likely to be seized on by outgoing chancellor Rachel Reeves as evidence her economic plan is working, even as she prepares to leave office when incoming prime minister Andy Burnham names his cabinet.

Services output rose 0.3% over the month, offsetting a 0.5% fall in production and a 0.8% drop in construction, with scientific research the strongest contributor, up 5.1%. Over the three months to May, GDP growth was 0.7%, a slight slowdown from 0.8% in the three months to April, and analysts warned the economy still looks likely to be stagnant over the second quarter as renewed Middle East hostilities push oil prices higher. The Resolution Foundation estimates more than half of Reeves's £23.6bn fiscal headroom could be wiped out by the war's effects, while the Treasury pointed to the UK's G7-leading growth and steady inflation as signs of restored stability.