On the surface, the UK’s economic recovery appears to be on track. The Office for National Statistics revealed this morning that retail sales were up 0.8 per cent last month, beating expectations of a 0.5 per cent rise. Consumer confidence and the number of people heading back to the shops continues to rise, with the proportion of online retail sales falling to 27.3 per cent. This is substantially higher, however, than the pre-Covid level of just under 20 per cent.
Non-food stores saw the biggest sales increase – 4.2 per cent – boosted, in part, by early Christmas sales. Toys, clothes and sports equipment all saw increases. Again, this is a sign that consumers are in recovery mode, but it is also evidence of new problems at play: in this case, worries about shortages on the shelves this Christmas, leading to early purchasing.
Today’s public borrowing figures also suggest there could be potential trouble ahead.
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