LONDON, July 13 Reuters Britain39;s economy contracted by less than expected in May despite the impact of strikes and an extra bank holiday to mark the coronation of King Charles, putting it on track to avoid a decline for the second quarter as a whole.

Economic output fell 0.1 in May from April, the Office for National Statistics ONS said, following growth of 0.2 in the previous month.

A Reuters poll of economists had pointed to a contraction of 0.3.

All sectors of the economy contracted in May with the exception of services, which showed no growth. The pound rose modestly against the dollar on the back of the data.

Business groups said the big picture of a tepid economy remained, albeit one with stubborn inflationary pressures that mean the Bank of England is likely to raise interest rates further.

Britain39;s economic recovery from the COVID19 pandemic has lagged most of its peers among major advanced economies, with only recessionhit Germany having fared as badly as of the first quarter of this year.

These GDP figures are unlikely to prevent another rate rise in August, said Suren Thiru, economics director at accountancy body ICAEW.

However, given the long time lag between rate rises and its effect on the real economy, tightening further risks damaging our growth prospects by overcorrecting for past errors.

Britain39;s finance minister Jeremy Hunt said high inflation continued to hamper the economy and he called for patience in bringing it down.

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