Hopes of a rapid recovery in Britain’s economy from the coronavirus lockdown have been boosted by a summer rebound in UK retail sales and the strongest monthly growth in business activity for five years.
The latest figures from the Office for National Statistics showed retail sales rose by 13.9% in June compared with May as pent-up demand among consumers returned overall spending close to pre-pandemic levels.
A health check on business activity from IHS Markit and the Chartered Institute of Procurement and Supply also showed Britain’s private sector economy returned to growth in July as clients and customers returned to spending and businesses were able to open their operations as staff returned.
The Bank of England’s chief economist, Andy Haldane, has pointed to private-sector data suggesting a rapid, V-shaped recovery with the economy growing by around 1% a week, though many of his colleagues are doubtful about the prospects of a sustained recovery.
The British Retail Consortium said earlier this month that spending among its members – typically large high-street chains – was 3.4% higher this June than last year.
Friday’s figures showed that retail sales slumped by 9.5% over the second quarter compared with the first three months of the year.
Online spending, which soared at the start of the lockdown, fell as a share of overall spending as shoppers in England were able to return to stores from June 15 onwards. But at 31.8%, it remained much higher than February’s 20%.
Consumer sentiment is still well below its level before the coronavirus struck Britain, according to a survey released earlier on Friday, and cafes and restaurants have reported subdued demand since they reopened on July 4.
The disease has killed more than 45,000 people in Britain, Europe’s highest death toll. BoE policymaker Jonathan Haskel said on Thursday that persistent health worries as well as a jump in unemployment risked halting the recovery.