U.K. Retail Sales Surged With Spending for Soccer Matches
(Bloomberg) -- U.K. retail sales surged unexpectedly in June as consumers spent more in grocery stores to celebrate European championship soccer, adding momentum to the economic recovery.
The volume of goods sold in shops and online rose 0.5% from the month before, the Office for National Statistics said Friday. Economists had expected a 0.1% drop. The figures followed an unprecedented jump in April when most stores were allowed to fully reopen for the first time since January.
The figures feed the debate about the strength of Britain’s recovery from 17 months of restrictions to control the virus. Pent-up consumer spending has driven up prices across the economy, lifting inflation above the Bank of England’s target for the first time in almost two years in each of the past two months. Policy makers led by Governor Andrew Bailey are considering whether to pare back their stimulus as soon as next month.
Sales in food stores bounced back in June, making the largest contribution to the increase after a sharp decline in May when consumers shifted spending to newly-reopened restaurants. England’s soccer team made it to the final on July 11 in the month-long contest. The team’s performance brought people into streets and back gardens to celebrate, since restrictions limited capacity in pubs.
Spending on fuel also increased during the month, reflecting people traveling more, but remained below pre-pandemic levels.
What Bloomberg Economics Says ...
“The U.K. is on course for a consumer-driven rebound as households make up for lost time. Pent-up demand and higher savings are set to unleash a spending recovery in the second quarter -- we forecast the economy will expand by 4.6%.”
--Niraj Shah, Bloomberg Economics. Click for the REACT.
Those contests accompanied by loosening lockdown rules fed a euphoria across the country. A separate report from GfK showed consumer confidence reached its strongest level since the start of the pandemic. That included a big jump in a sub-measure with shoppers agreeing that now is the “right time to buy.”
Prime Minister Boris Johnson dropped many of the last remaining restrictions on social distancing this week even though a surge in infections is stirring concerns about whether a further clampdown will be needed in the weeks ahead.
©2021 Bloomberg L.P.