Retail sales in Britain slipped back in May as people ventured bent spend money at restaurants and pubs following the easing of coronavirus lockdown restrictions, official figures showed Friday
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The Office of National Statistics found that retail sales during May were 1.4% less than the previous month, once they surged 9.2% after shops selling nonessential items were allowed to reopen after a months-long shutdown.
It said the most important downward contribution came from food sales, which fell 5.7% as restrictions on the hospitality sector were eased further to permit people to satisfy up inside. Pubs and restaurants previously were allowed to serve customers only outdoors.
Analysts said the monthly decline doesn’t represent the beginning of a slowdown within the British recovery from its biggest economic contraction in additional than 300 years. In 2020, British economy contracted around 10% as a results of pandemic restrictions.
“Retail sales, unlike another parts of the economy, are pretty quick to urge back to where they were before the virus,” said James Smith, an economist at financial firm ING.
The statistics agency said retail sales were 9.1% above in February 2020 before the pandemic hit the economy.
Smith thinks that the rapid rollout of vaccines within the U.K. has helped prop up confidence within the economy, with people more inclined to venture out and spend money they need saved during the pandemic while performing at home.
“We’ve seen consumer confidence has really soared,” he said. “People feel safe to travel out and do things again …. that’s been a true positive and you’ll see that in retail sales numbers.”
Despite the monthly decline in food sales, food retailers have enjoyed bumper sales during the pandemic. Tesco, Britain’s biggest supermarket chain, reported half-moon figures Friday that showed a tenth increase in same-store sales. Though seemingly low, that increase compares with an equivalent period last year, when sales were booming because the U.K. first went into lockdown.
“Tesco’s half-moon numbers look sluggish, but that’s because they’re lapping the unprecedented demand triggered by the pandemic this point last year,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.
Rate-setters at the Bank of England are going to be digesting the recent economic news before their meeting next week. The consensus within the markets is that the bank will keep its main rate of interest unchanged at the record low of 0.1% and maintain its current stimulus program.
However, the balance is getting more nuanced because the recovery takes root, not least because the annual rate of inflation has risen to 2.1%, above the bank’s target of twenty-two . Hope this dip will be soon recovered by this year’s Black Friday Sale Online.
