The British Retail Consortium has released its Economic Briefing Report for April 2021.
There are renewed hopes that the UK economy will see a robust economic rebound. Despite the national lockdown, February’s economic performance was improved as businesses continued to adapt to operating within health restrictions and to new border rules.
It is estimated that UK households have amassed around £160bn in savings since the pandemic started to February. It’s not clear what proportion of those will be spent, as savings are concentrated in the higher income households, while lower income ones had a negative shock to their income since the pandemic started. Moreover, the uncertain economic outlook might encourage people to hold on to their savings.
There are some promising signs that the tax reduction incentive by the government for companies that accumulate capital is working, with capital investment intentions by firms reaching their highest since July 1997. This would drive up employment and generate long-term growth.
Headline Statistics:
- UK monthly GDP rose by 0.4% in February, up from -2.2% in January, although below market expectations of 0.6%. Despite the national lockdown, February’s economic performance was improved as businesses continued to adapt to operating within health restrictions and to new border rules.
- In the week to April 22nd, total credit and debit card purchases rose by 7 percentage points from the previous week to 98% of its February 2020 average, driven mainly by a continued increase in “delayable” spending.
- Businesses expect to increase their capital expenditure, with investment intentions for plant & machinery at their strongest since July 1997, bringing hopes of an “investment-led recovery”.
- Unemployment fell to 4.9% in the three months to February, down from 5.0% in the three months to January. In the week of April 23rd, online job adverts were 3% higher than in February 2020, and the first time they have exceeded this level since 6 March 2020.
- CPI inflation rose to 0.7% in March, up from 0.4% in February.
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 alice@mia.org.uk
