UK retail sales climbed 3.6 per cent higher in July compared to June, to beat their pre-pandemic levels, official data showed today.
The climb came despite a seven per cent fall in online shopping after digital retail comprised a record 33.3 per cent of all retail sales in May.
A sharp 11.9 per cent jump in clothing sales – the worst hit shopping item during the pandemic – helped UK retail sales rise three per cent above their level in February.
However, clothing sales were still 25.7 per cent lower than February, a month before the pandemic forced the UK into lockdown.
Supermarket sales and non-store retailing sales remained at high levels in July, according to the Office for National Statistics (ONS). But they posted month-on-month declines of 3.1 per cent and 2.1 per cent respectively.
The 3.6 per cent climb in UK retail sales showed the pace of the UK recovery has slowed since the end of lockdown after sales rose an extraordinary 13.9 per cent from May to June.
The volume of retail sales is now three per cent above its level in February 2020, the month before coronavirus sent the UK into lockdown.
Fuel sales remained 11.7 per cent lower than February despite climbing again, as Brits put off car journeys following months of staying at home.
UK borrowing casts doubt over retail sales data
While retail sales continued to recover after lockdown, the UK fell into its worst recession on record between April and June as it booked two consecutive quarters of declining GDP.
Ruth Gregory, a senior UK economist at Capital Economics, warned the sales data overplays the extent of the UK’s economic recovery.
She pointed out that lower borrowing in July suggests government support schemes propping up jobs are beginning to conclude.
“With the smaller rise in public sector borrowing in July compared to June suggesting that government support is now unwinding, retail sales growth will undoubtedly slow,” she said.
“Online sales fell by seven per cent, suggesting that the recovery in physical shops was more impressive than the headline figure and that shoppers are starting to return to the high street.”
The UK retails data came as the ONS revealed the UK now has £2 trillion of public debt to get rid of, following its massive public spending over lockdown.
Public debt has jumped by an enormous £228bn since the end of July, increasing by 20.4 percentage points to hit 100.5 per cent of GDP. In percentage terms, that is the highest level since the 1960s.
More to follow.