UK retail gross sales recovered weakly in December and borrowing bounced
© Reuters. FILE PHOTO: Shoppers queue to enter a shoe store at the start of the Boxing Day sale during the coronavirus disease (COVID-19) outbreak in Manchester
By David Milliken and Andy Bruce
LONDON (Reuters) – UK retailers struggled to recover from a partial coronavirus lockdown the previous month in December, marking a sluggish end to their worst year yet, while national debt climbed to its highest level since 1962, according to official data on Friday showed.
The numbers bode well for the UK economy in early 2021, which has likely reversed under pressure from new measures against COVID introduced in January.
Treasury Secretary Rishi Sunak is also being pressured by some members of his Conservative Party to show spending is under control when he presents a new budget on March 3, after targeting what is currently the highest annual borrowing since World War II.
Sunak reiterated its pledge to put public finances on “more sustainable foundations” once the economy begins to recover, and the government hopes a swift introduction of vaccines will provide a swift recovery from the effects of the worst COVID-19 numbers in the world Will enable fatalities in Europe.
The UK’s Bureau of National Statistics announced that retail sales rose 0.3% in December, far less than what economists in a Reuters poll projected for a 1.2% increase, bringing them to just 2.9% were higher than a year earlier.
For 2020 as a whole, retail sales declined 1.9% – the largest drop in the calendar year since those records began in 1996 – and apparel sales fell more than a quarter.
The pound sterling fell slightly against the dollar and euro after retail sales were weaker than expected.
“It was not a Merry Christmas for retailers with a big upswing after the lockdown did not occur in November,” said Jeremy Thomson-Cook, chief economist at Equals Group.
Public sector borrowing stood at £ 34.1 billion ($ 46.65 billion) in December, just above what the Reuters poll projected. Borrowing since the start of the fiscal year in April was a record £ 270.8 billion.
Total public sector debt had reached £ 2.132 trillion, or 99.4% of GDP, its highest level since fiscal year 1962.
December had given the UK economy some respite, with official levels of production falling more than any other advanced country, as well as the highest official death toll in Europe from COVID-19.
In November, the economy contracted 2.6% due to a four-week lockdown in England and similar measures elsewhere in the UK.
This month the government went further, shutting schools and non-essential retailers – which most economists believe will cause the economy to decline in the first quarter.
Experimental data from the ONS on Thursday showed that consumer spending was 35% lower in early January than it was before the February pandemic – although the numbers weren’t seasonally adjusted to reflect the typical post-Christmas lull.
Retail sales outperformed other areas of consumer spending. Buyers switched to online stores, where spend increased 46.1% in 2020.
($ 1 = 0.7310 pounds)
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