Britain’s economy has unexpectedly returned to growth in May, boosted by a boom in holiday bookings and increase in GP appointments.

The Office for National Statistics said gross domestic product (GDP) rose 0.5% in the month, after a revised decline of 0.2% in April. City economists had expected flat growth amid fears about the impact of the cost-of-living crisis.

Although activity is generally on the rise this month, the latest snapshot shows a decline in consumer services, driven by lower retail sales and lower sporting and recreational activities.

Industrial production increased by 0.9% this month, driven by the strength of the manufacturing sector, and the construction sector grew by 1.5% as a result of increased housing activity and office renovations.

The National Bureau of Statistics said health is the main driving factor as more and more people look to their GP and make up for the end of coronavirus testing, follow-up and vaccination programs.

Ground transportation staff also had a busy few months, but travel agents and tour operators benefited from increased bookings amid sluggish summer vacation demand. Gross domestic product is the sum of all goods and services produced in the economy, including sectors such as healthcare, education, and government.

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The economic contribution of family doctor visits and other medical services without market prices is estimated by the statisticians through the activity counts. This figure emerges as airports suffer from increased demand for international travel as tourists return overseas after pandemic regulations are relaxed across the country.

Analysts said the strong reading of a monthly gross domestic product would prompt the central bank to raise interest rates by 0.5 percentage point at the next monetary policy committee meeting in August, when the central bank predicted inflation to reach its highest level since 1982.

Consumer services fell 0.1 percent during the month, and households were hit by an increase in the cost of living. However, this was better than the 0.8% drop in April, mainly due to an 11% increase in holiday bookings compared to the previous month.

​​Kitty Ussher, chief economist at the Institute of Directors, said the latest numbers are reassuring for business leaders.

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“While many people are undoubtedly feeling the pressure on household bills, the much-publicised weakening in retail sales is also partly offset by consumers switching back to spending on the separate category of tourism travel,” she said. “Overall, there’s nothing in this data that will prevent the Bank of England from continuing to raise interest rates when it meets over the summer.”

However, there are fears that the cost-of-living crisis could force consumers to withhold spending amid further increases in domestic energy bills in the coming months.

Meanwhile, economists expect activity to fall sharply in June due to the aftermath of an extra bank holiday to celebrate the Queen’s platinum award, which could lead to a contraction in GDP in the second quarter. If the economy contracts again in the third quarter, it would meet the technical definition of a recession.

Paul Dales, chief UK economist at Capital Economics, said:

“With real household disposable incomes set to fall further in the third quarter, a recession is still a real risk. That may mean the economy proves to be a poisoned chalice for whoever wins the race to be the next prime minister.”

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Business leaders said the economy still faces significant structural challenges, including Brexit uncertainty, the continued closure of Covid-19 and China’s supply chain problems, as well as rising energy costs.

Shadow Chancellor Rachel Reeves said living standards had fallen but real wages had not risen. “Instead of presenting the plans we need for a stronger, more secure economy, the Tories are spending every waking minute indulging in unfunded fantasy economics,” she said.

“It’s always great to see the economy growing but I’m not complacent. I know people are concerned, so we are continuing to support families and economic growth.”

Nadeem Zahavi, the chancellor and one of Boris Johnson’s challengers for the leadership of the Conservative Party, said:

“It’s always great to see the economy growing but I’m not complacent. I know people are concerned, so we are continuing to support families and economic growth.”