The UK economy contracted by 0.1% in May, according to the latest GDP figures released today.

However, the fall was better than a forecasted decline of 0.3%.

May’s 0.1% fall compares with a 0.2% growth in GDP for the previous month.

ONS, which produces the data, said the bank holidays in May - including an extra one for the King's Coronation - had an impact on growth alongside continuing high inflation.

The decline was most noted in manufacturing, energy and construction sectors.

Despite the GDP figures being better than expected, wealth managers continue to have concerns.

Richard Carter, head of fixed interest research at Quilter Cheviot, said: “As the government and Bank of England scramble to bring inflation down, there are signs that the large price rises and increase in interest rates are starting to bite on the economy as growth fell over the month and flatlined over the last quarter.

"The UK economy has done well to avoid a recession to date, but how long this can continue when rates are expected to reach 6% and beyond remains to be seen. Indeed, you just have to look at the data from the Bank of England’s recent stress test on the UK banking system to see that there are skeletons lurking in the closet when it comes to mortgage risk and people rolling onto much higher rates.

“Furthermore, while the labour market remains very tight, it is beginning to show signs of weakening and may start to roll over soon, exposing the economy to both a weaker consumer and corporates beginning to struggle. The savings accumulated during the pandemic cannot be relied on for much longer and the effects of inflation and interest rate rises to date will ultimately have sucked a huge amount of money out of the economy.”

Daniele Antonucci, chief investment office at Quintet Private Bank (parent of Brown Shipley), said the latest GDP data gives the Bank of England no choice but to raise interest rates again.

She said: “Averaging out the past three months, the overall picture is one of stagnation. We expect further weakness ahead, as the triple whammy of interest rate rises, elevated inflation and fiscal austerity bite.

“Even though overall inflation has moderated a little, its level remains high. What’s more, core inflation, which excludes volatile components such as energy and food, hasn’t eased convincingly yet.

“With a tight labour market and strong wage growth, we think the Bank of England will have no choice than raising interest rates for a while longer."