United Kingdom in May 2026: the most important developments in economy
The United Kingdom's economy in May 2026 was shaped by the Iran war, high borrowing costs and turmoil at BP. On 26 May BP fired its chair, Albert Manifold, citing serious governance concerns over his behaviour, oversight and leadership standards, and the company's shares fell sharply. Manifold denied bullying and misconduct claims. Earlier in the month BP was reviewing its UK North Sea assets, weighing the sale of its Egyptian gas assets, and had bought a 40% stake in Uzbek oil and gas blocks. BP, Shell and TotalEnergies were reported to have made billions from war-related trading.
Markets and public finances were under strain. Long-term UK borrowing costs rose to their highest level since 1998 in mid-May and sterling slumped, while Prime Minister Keir Starmer's future was in doubt; bonds rallied on 8 May after he said he would stay in office. The Bank of England expects a 125 billion pound net loss on its bond-buying programme. The UK recorded its highest April budget deficit since the pandemic. Unemployment rose unexpectedly to 5% in April, the highest in over two years, although the economy grew unexpectedly in March and the IMF upgraded its growth forecast. Inflation dropped sharply.
Fuel supply was a central concern. With the Strait of Hormuz closed, UK airlines planned to consolidate flights to save jet fuel, and British Airways said it would raise business class fares after a 2 billion euro fuel hit. On 19 and 20 May the government relaxed sanctions to allow imports of diesel and jet fuel made from Russian crude. The same week the UK and the Gulf Cooperation Council reached a free-trade deal.
Other corporate news included HSBC's profit miss after a 400 million dollar charge linked to alleged fraud in its private credit business, which cut its shares by 6%. The government moved to nationalise British Steel. Google DeepMind took a minority stake in the maker of Eve Online, and its UK staff voted to unionise.
by WorldBrief & Maksim Micheliov | AI-generated summary
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