UK Retail Sales Rebound In May, Borrowing Above Forecast
Published on Jun 19 2020 8:58 AM
British retail sales rebounded much more strongly than expected last month as the country gradually relaxed its coronavirus lockdown, but public borrowing hit a record high and debt passed 100% of economic output.
Official data showed sales volumes in May jumped by a record 12.0% after a historic 18.0% slump in April - a rise at the top end of economist forecasts in a Reuters poll but which still left sales 13.1% down on a year ago.
Bank of England Governor Andrew Bailey said on Thursday that the economy appeared to be on course to shrink less in the first half of the year than he had feared last month, though this did not necessarily mean there would be a strong rebound.
Britain closed non-essential retailers to the public in late March and only a small number such as garden centres were able to reopen in May.
Other stores in England were permitted to reopen on June 15 subject to restrictions on the number of customers allowed in.
Sales at non-food stores increased by 23.7% in May, but were still 42.1% down on a year earlier, with clothes stores the hardest-hit category with sales down by more than 60%.
Public sector net borrowing, which is surging to fund the government's huge increase in public spending, hit £55.2 billion in May - a record high after April's reading was revised down to £48.5 billion from £62.1 billion.
The May figure was nine times bigger than the deficit in same month last year.
A measure of public sector debt edged above 100% of economic output for the first time since 1963, when Britain was still paying off the costs of the Second World War.
In April and May, the first two months of the current financial year, borrowing stood at £103.7 billion, £87 billion more than in the same period last year.