"Get Out There and Spend" says Chancellor ...
Retail sales "bounced back" after a dismal start to the year, according to the headlines in The Times today. Sales increased by 2% in February compared to prior month.
Not much of a bounce back really. Sales were down by almost 4% compared to prior year. Exclude petrol and other fuels and overall sales, were down by just 1%.
The pattern of pandemic sales repeats. DIY and garden center sales were up by over 20%. Clothing and footwear sales were down by 50%. Alcohol sales were up by over 40% in the month. Food sales were up. The proportion of food sales online, increased to 12%, from just 5% last year.
Online sales, as a proportion of all retail sales, increased to a record 36%. The damage to conventional retail continues. Just 15% of rents due, were paid on the March quarter day, this month, placing additional pressure on property owners, bankers and other lenders.
In other news, the unemployment rate fell to 5%. Earnings increased to 4.8%. The Chancellor is urging people to "get out there and spend". "Go have fun and spend money". Shops are due to re-open on the 12th April. Rishi Sunak said, people should "do their bit" by spending savings they had built up during the lock down.
The Chancellor believes there is a lot of excess savings, which could be a stimulus to growth. The Office For Budget Responsibility said last month, that households have accumulated £180 billion in accumulated savings. Spend it all, and with VAT back at 20% that's a further £30 billion for the Treasury coffers.
In an effort to to help the recovery and increase costs for retail, shops would be allowed to open until 10:00 pm in the evening, said Robert Jenrick, the Communities Secretary. Time then, to pop into the pub, with no curfew in place. Just carry a vaccine passport and be prepared for a blood test. Scientists in SAGE are working on a breathalyser. Yes! Soon it will be necessary to "blow into the bag" before you can get a drink ...
The Saturday Economist
John Ashcroft publishes the Saturday Economist. Join the mailing list for updates on the UK and World Economy.
|The Saturday Economist
The material is based upon information which we consider to be reliable but we do not represent that it is accurate or complete and it should not be relied upon as such. We accept no liability for errors, or omissions of opinion or fact. In particular, no reliance should be placed on the comments on trends in financial markets. The presentation should not be construed as the giving of investment advice.