Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Business

Lockdown decimates UK retail, borrowing surge slows

2021 02 19T091019Z 2 LYNXMPEH1I0AW RTROPTP 4 HEALTH CORONAVIRUS BRITAIN ECONOMY - Global Banking | Finance

By William Schomberg and David Milliken

LONDON (Reuters) – British retail sales tumbled in January as shops went back into lockdown, official data showed, but lower-than-expected public borrowing gave at least some relief to finance minister Rishi Sunak as he prepares his next round of emergency spending.

Retail sales volumes slumped by 8.2% from December, a far bigger fall than the 2.5% decrease forecast in a Reuters poll of economists and the second largest on record.

“The only good thing about the current lockdown is that it’s no way near as bad for the economy as the first one,” Paul Dales, an economist at Capital Economics, said.

The smaller fall in retail sales than last April’s 18% plunge reflected the growth in online shopping.

The Office for National Statistics said public sector borrowing of 8.8 billion pounds ($12.3 billion) was the first January deficit in a decade, but the deficit was a lot less than a forecast of 24.5 billion pounds in the Reuters poll.

That took borrowing since the start of the financial year in April to 270.6 billion pounds, reflecting the surge in spending and tax cuts ordered by Sunak.

That figure does not yet include losses on government-backed loans which are likely to add 30 billion pounds to the shortfall this year, according to the Institute for Fiscal Studies think tank.

Sunak is expected to extend the government’s wage subsidies, at least for the hardest-hit sectors, in his budget statement on March 3, but he said on Friday the time would come for a reckoning.

“It’s right that once our economy begins to recover, we should look to return the public finances to a more sustainable footing and I’ll always be honest with the British people about how we will do this,” he said.

Some economists see higher taxes sooner rather than later.

“Big tax rises eventually will have to be announced, with 2022 likely to be the worst year, so that they will be far from voters’ minds by the time of the next general election in May 2024,” Samuel Tombs, at Pantheon Macroeconomics, said.

Public debt rose to 2.115 trillion pounds or 97.9% of gross domestic product, a share not seen since the early 1960s.

BOUNCE-BACK AHEAD?

Britain’s economy – which had its biggest slump in 300 years in 2020 when it contracted by 10% – will shrink by 4% in the first three months of 2021 before recovering thanks to the country’s fast COVID-19 vaccination programme, the Bank of England says.

Prime Minister Boris Johnson has said he will lift the lockdown in England only gradually.

But a survey showed consumers were their most confident since the pandemic struck.

“The hope, and our expectation, is that when the lockdown is finally lifted, we will see a surge in consumer spending, rather than a more permanent scarring of the consumer confidence,” James Sproule, an economist at Handelsbanken, said.

Retail sales in January were down 5.9% compared with the same month in 2020.

Department stores and clothing stores saw the sharpest fall last month while online shopping rose to its highest ever share of total spending at 35.2%.

On the public finances, the ONS said central government tax receipts fell by just 800 million pounds from a year earlier, helped by self-assessed income tax payments which rose after a delay in an earlier deadline.

It also said there was a 300 million-pound revenue boost from customs duties, which until last month went to the European Union, and for the first time Britain paid no contribution to the EU budget which used to average 1 billion pounds a month.

($1 = 0.7160 pounds)

(Editing by Angus MacSwan)

Global Banking & Finance Review

 

Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!


By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review │ Banking │ Finance │ Technology. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post