UK retail sales rebound in warm May as consumer confidence improves – business live | Business

The latest public finance figures show that the UK’s net debt as a percentage of GDP remains at levels last seen in the early 1960s.

The ONS reported this morning that public sector net debt, excluding public sector banks, was provisionally estimated at 99.8% of gross domestic product (GDP) at the end of May.

This is 3.7 percentage points more than a year ago.

In historical terms, this is a level last seen in 1961, when Harold Macmillan was prime minister and the UK was paying off the debt it had built up during the Second World War.

As noted in the introduction, the UK borrowed a further £15 billion in May. While this is £800m more than a year ago, it is £600m less than the Office for Budget Responsibility forecast.

British consumer sentiment rose to a two-and-a-half-year high this month, market research firm GfK reported this morning.

GfK’s consumer confidence survey rose to -14 in June from -17 in May, the highest reading since November 2021.

This may have led to increased retail sales spending last month.

The survey found that households have a more optimistic view of the economic situation over the past 12 months and the outlook for the coming year.

However, people have become gloomier about their personal finances, stressing that times are tough even though inflation has fallen back to 2%.

Joe Staten, client strategy director c GfK, explains:

These measures of the economy registered sharp increases of seven points and six points, respectively, and there was a welcome three-point boost in intentions to make major purchases.

Although June’s reading of -14 was the third month in a row that confidence rose, the headline result remained negative due to the hardships experienced by so many as the relentless cost of living crisis batters household budgets.

Good morning and welcome to our ongoing coverage of business, financial markets and the global economy.

Today we’ll be analyzing the last bit of significant economic data ahead of the UK General Election, which has just been released.

The last one retail sales figures showed consumer spending picked up last month, while new lending statistics shed light on public finance.

Retail sales statistics for May show that sales volumes rebounded in May after falling in April when bad weather drove shoppers off the high street. That was considerably stronger than the 1.5% growth forecast by City economists.

Retail sales rose 2.9% in May 2024 after falling 1.8% in April, Office for National Statistics reports.

The ONS says:

Sales volumes rose across most sectors, with clothing retailers and furniture stores recovering from poor weather in April.

Last month was the warmest May on recordin a series since 1884, according to the Met Office.

More broadly, sales volumes rose 1.0% in the three months to May 2024 compared to the previous three months, ONS adds.

The volume of retail sales increased in all major sectors, the ONS said.

The biggest growth was seen among “non-store retailers”, such as online stores, where volumes jumped 5.9% month-on-month.

At department stores, clothing stores, home goods retailers and other non-food stores, volumes rose 3.5% in May.

These increases suggest that people are feeling more confident about economic conditions – as shown in the latest consumer confidence survey by GfK. But while this may support Rishi Sunak’s claim that the economy is turning around, it does not give the prime minister a boost in the polls….

The public financesmeanwhile, they show the UK borrowed £15bn in May to cover the gap between government spending and income. This is slightly lower than forecast but £800m more than in May 2023.

This was the third-highest May borrowing since monthly reports began in 1993.

The agenda

• 7am BST: UK Public Finances for May

• 7am BST: UK retail sales for May

• 9am BST: Eurozone flash PMI survey for June

• 9.30am BST: Flash Eurozone PMI survey for June

• 14.45 BST: Flash US PMI survey for June

• 15:00 BST: US existing home sales for May