The British Retail Consortium has released its Economic Briefing Report for February 2021.
- The pandemic has delivered an extraordinary shock to the UK economy, wiping out six years’ of growth in 2020 alone.
- In Q4, GDP rose by 1.0%, down from 16.1% in Q3. In December, it grew by 1.2%, following November when it contracted by 2.3%. The service industry was the main driver of growth in December, as the easing of restrictions early-month built a good momentum for the retail and the hospitality industries.
- Consumer spend recovery is expected to be the driver of economic rebound in 2021, but to what extent that will happen is unclear. The Bank of England estimates that between March and November, excess savings reached £125bn, or around 8% of annual household income, significantly above historical levels. However, it is mostly retired households and households in the top 40% of the income distribution that have experienced marked increases in savings, as their incomes have been largely maintained while consumption has fallen sharply.
- The UK’s labour market is running well below any measure of full employment. 800,000 jobs have been lost since the March. Employment fell to 75% in December from 76.6% in February, unemployment rose to 5.1% from 4% in February, and inactivity is on the rise.
- The number of people on furlough in the UK rose in January to 4.8mill up from 4.0mill in December, a 21% increase. In retail, we estimate that furloughs increased from roughly 400,000 in December to 600,000 in January, or a 42% rise.
As a member of the BRC, the MIA can share the full report with our members. If you would like to see the full report, please contact firstname.lastname@example.org