UK retail sales rebound after record slump
LONDON: UK retail sales rebounded 12 percent in May as some shops reopened, having slumped a record 18 percent in April after the country entered coronavirus lockdown, official data showed Friday. The Office for National Statistics (ONS) also revealed that total government debt rose to more than Britain’s entire economic output for the first time since 1963, as the Treasury sought to keep millions of workers in their jobs.
Friday’s figures come a day after the Bank of England said it would provide further cash stimulus worth £100 billion ($126 billion or 112 billion euros) to prop up Britain’s coronavirus-hit economy — on top of the £200 billion already announced.
“Retail sales volumes partly rebounded in May... but sales were still down by 13.1 percent on February before the impact of the coronavirus,” the ONS said Friday.
“Non-food stores provided the largest positive contribution to the monthly growth in May,” led by a 42-percent surge in sales across household goods shops.
Britain went into lockdown on March 23, but this week the government allowed non-essential shops, such as clothing stores, to reopen.
A surge in online shopping during the lockdown also helped retailers to recover in May, but the sector and overall economy remains shattered by the fallout from COVID-19.
“Naturally, spending on goods will recover faster than on services, which usually require human contact and remain largely unavailable,” noted Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
The nation’s debt mountain meanwhile grew last month to £1.95 trillion, or 100.9 percent of Britain’s gross domestic product. That compared with 97.7 percent in April, with multi billion-pound government help to pay the wages of 9.1 million people tipping the level above 100 percent.
Furloughing, which backs up 80 percent of salaries but is set to end in October, is expected to cost about £60 billion, according to government estimates.
The ONS on Friday added that the government deficit for the current financial year hit a record £55.2 billion in May.—AFP