July 11 Reuters Britain39;s economy grew more quickly than expected in May, providing some momentum for the new government of Prime Minister Keir Starmer but adding to doubts about the possibility of a Bank of England interest rate cut next month.

Economic output increased by 0.4 in May, after a 0.2 rise in April, the Office for National Statistics said. A Reuters poll of economists had pointed to another 0.2 monthly increase.

The strength of the upturn added to doubts that the BoE will begin cutting interest rates on Aug. 1. Three policymakers this week emphasised the strength of domestic price pressures.

The chance of a rate cut in three weeks39; time edged below 50 in early trade on the futures markets on Thursday from just above 50 on Wednesday.

May saw a broadbased increase in economic output, with the services, manufacturing and construction industries all growing and the latter up by 1.9 on the month, driven by housebuilding.

The figures represented an early boost for the new Labour administration, which has set itself the aim of achieving the fastest growth among the Group of Seven advanced economies on a sustained basis.

The improving economic outlook suggests the government may benefit from the economic recovery being stronger than most forecasters anticipate, Ashley Webb, an economist with consultancy Capital Economics, said.

Over the three months to May, the economy expanded by 0.9, the strongest reading since the three months to January 2022,…