According to the latest report published in March by the Office of National Statistics, there had been a surprising increase in the retail sales in March despite looming Brexit. It seems like British customers have completely forgotten the Brexit uncertainty. The city economists were assuming there would be a decline in volumes by 0.4 per cent, but instead it increased by 0.4 per cent.
There was little sign that the rise in sales was because of stockpiling ahead of a potentially disorderly Brexit: food sales were the only subcategory to see a drop-in sale during the January month as published by the ONS. [optin-monster-shortcode id=”wxhmli4jjedneglg1trq”]
Consumer spending so far has been the primary source of growth in the UK since the Brexit referendum in June 2016. Due to the fall in the prices of the pound in the international market, there is a rise in import prices as well. But that did not affect the borrowing and spending capacity of the Britons. Economists had expected for first few months of 2019, a decline in the household finances to prompt consumers, but as per the latest data the consumers spending has remained positive and is continuously rising.
Week December sales were followed by an increase of 0.9 per cent in January followed by a surprising sale in February as well. As per the ONS’s head of retail sales, Rhian Murphy: Increase in the retail sales in the three months period till February is mainly due to a significant increase in the fuel sales and online shopping. Clothing stores had shown a strong sale as companies were providing lucrative discounts and a reduction in the prices. Food business had also grown after a marginal decline during Christmas.
Discounting schemes offered by the retail outlets led to the stronger retail sales and in November lifted by Black Friday sales. In January, gift card spending, and after-Christmas sales led to the surge in the demand and increased sales.
As per the latest figure the Britain’s employment rate has been growing from the start of the year. As per the official national statistics data, there is a significant and faster increase in employment and wages as compared to inflation. In the month of February, increase in the retail sales was predominantly due to improving trend in real wages not because of uncertainty created by the Brexit, as stated by Samuel Tombs, the chief UK economist at consultancy Pantheon Macroeconomics. As stated by Tombs, due to the tighter labour market and low-interest rates, mean consumer spending to keep rising at a significant rate in the second quarter, provided if there is no Brexit deal.
Public sector finances data, also published on Thursday, said borrowing fell to its lowest level for 17 years during the financial year up to the end of February. Public sector net borrowing was just £0.2 billion in February itself, lower than the £0.7 billion as economists had expected.
This meant government debt has fallen from 75 per cent of national income in February 2018 to 74.1 per cent of national income this year.
There was a significant increase in the retail sales in last few months. The economists had forecasted a decline in the UK retail sales due to Brexit Uncertainty. There is a significant and faster increase in employment and wages as compared to inflation as per national statistics data. The increase in real wages and lucrative discounts provided by the stores were the real reason for this significant increase in the sales.