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Triple dose of good news for the UK economy as high street bounces back

·2-min read
Rishi Sunak (PA Wire)
Rishi Sunak (PA Wire)

THE high street is booming, the housing market is on fire and the wider economy is also bouncing back from the pandemic, three sets of figures show today.

Retail sales jumped 9.2% in April, up 70% on March as non-essential shops re-opened. Online sales dipped from 35% to 30%, but overall sales were 10% higher than they were pre-pandemic.

Paul Dales at Capital Economics called the surge in clothing sales in particular "astonishing".

Ulas Akincila at online trader INFINOX, said: “Britain’s high street has come out swinging, and then some. Analysts had been expecting a big April; what they got was a blockbuster. The obituaries written about the high street now look a little premature. The big question now is how well this boom will sustain, and how much of it is the fleeting exuberance of a country enjoying the first significant easing of lockdown restrictions.”

The IHS Markit CIPS PMI figure, a closely watched index of economic activity, came in at 62, the highest pace of expansion since the survey began. Any number above 50 signals growth.

Investec said in a note to clients: “Overall today’s evidence confirms that the UK economy is squarely in lift-off mode. Indeed while our GDP forecast for 2021 remains at 7.5%, we continue to view the risks lie to the upside, with a realistic possibility that growth will exceed 8%.”

And while the property market cooled in April, transactions are up 180% on a year ago.

Tahir Farooqui, CEO of property firm Canopy, said: “Housing demand is beginning to cool off, but property prices remain eye-wateringly high. First-time buyers may now benefit from less competition in the market, but many will be at risk of missing the boat for stamp duty exemptions on higher-priced properties.”

The jump in high street sales will add to concern that inflation could spiral. It came in this week at 1.5% for April, doubling from March.

The British Retail Consortium offered caution however. BRC chief executive Helen Dickinson said that while the figures were "a step in the right direction", demand "remains fragile". "Footfall is still down by 40% on the pre-pandemic period, and there are still 530,000 people who work in retail still on furlough," she said, adding that the end of the full business rates relief in England "poses a significant threat to retailers".

Chancellor Rishi Sunak is under pressure to keep offering government support to businesses as they fight back from Covid.

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