UK retail gross sales are falling on account of new lockdowns and borrowing lower than Reuters anticipated
© Reuters. Official UK GDP figures to be released
By David Milliken and William Schomberg
LONDON (Reuters) – UK retail sales fell in January as non-essential stores resumed lockdowns, official data showed, but unexpectedly low public borrowing provided Treasury Secretary Rishi Sunak some relief as he worked on a budget.
Retail sales were down 8.2% from December, far larger than the 2.5% decline projected by a Reuters poll of economists and the second largest since the April 2020 decline at the start of the pandemic.
“The drop this time was not as big as the first lockdown as some stores have adapted to current circumstances and services like click-and-collect help cushion the fall,” said Jonathan Athow, statistician at ONS.
The Bureau of National Statistics also said public sector borrowing for January was £ 8.8 billion ($ 12.3 billion), the first January deficit in a decade but far less than a forecast of 24, £ 5 billion in Reuters poll.
Borrowing since the start of the fiscal year in April was £ 270.6 billion. This reflects the huge spike in spending and tax cuts that Sunak has ordered since the pandemic began.
Sunak is expected to announce its next spending and tax plans on March 3, if it will extend government wage subsidies to at least the hardest hit industries.
The ONS data also showed that national debt rose to £ 2.115 trillion, or 97.9% of gross domestic product, a proportion that has not been seen since the early 1960s.
The UK economy, which saw its biggest slump in 300 years, declining 10% in 2020, is expected to contract 4% in the first three months of 2021 due to recent lockdowns, according to the Bank of England.
Prime Minister Boris Johnson has announced that the lockdown in England will only be lifted gradually.
However, the introduction of COVID-19 vaccinations in the UK – the fastest program in Europe to date – has increased the prospect of a recovery later this year.
A poll released on Friday found that UK consumers have been the most confident since the COVID-19 pandemic almost a year ago.
Friday’s ONS data showed that the month-over-month decline in retail sales between December and January was steeper than a 4.0% decline in November as non-essential retailers also closed.
In April of last year, shortly after the first lockdown began, sales volume fell 18.0%.
Sales in January decreased by 5.9% compared to the same month last year 2020.
Department stores and clothing stores saw the biggest drop in sales last month, while online shopping rose 35.2% to the highest share of total spend ever.
($ 1 = 0.7160 pounds)
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