UK retail is recovering a little faster than economists expected. In July sales increased by 2 percent compared to the previous month, reports the British statistical office. Non-food sales rose 10 percent, but remained below the pre-corona level.
The increase in sales is a bright spot in a series of bad news in the industry. For example, department store chain Marks & Spencer announced last month it would cut 7,000 jobs as shoppers would not leave stores due to the corona virus outbreak. Although sales in this sector are rising again, much of this is due to online sales, according to ING economists.
The retail numbers follow a survey by research firm GfK, which found consumer confidence is still in the doldrums, partly due to job concerns. The UK government this month started shutting down a wage subsidy program for companies that temporarily had no or less work for their employees due to the corona crisis. This led to warnings that millions of Britons could lose their jobs. ING experts therefore expect UK households’ purchasing power to decline in the coming months due to rising unemployment.