British retail sales last month rebounded much more strongly than expected as the country gradually relaxed its COVID-19 lockdown, but public borrowing hit a record high and debt passed 100 percent of economic output.
Sales volumes last month jumped by a record 12 percent after a historic 18 percent slump in April, official data showed.
The rise was at the top end of economists’ forecasts in a Reuters poll, but still left sales 13.1 percent down from a year earlier.
Photo: EPA-EFE
Consumer confidence figures for last month were the strongest since the lockdown began, but remained weak, a separate survey showed.
Bank of England Governor Andrew Bailey on Thursday said the economy appeared to be shrinking a bit less severely in the first half of the year than the bank feared last month, but there was no guarantee of a strong rebound and unemployment would rise.
“May’s recovery in retail sales should not be interpreted as a sign that the economy is embarking on a healthy V-shaped recovery from COVID-19,” Pantheon Macroeconomics economist Samuel Tombs said.
He said that household incomes would be strained when a government support scheme that covers 9 million jobs is wound up in October, before some sectors are likely to be back to normal.
Britain closed nonessential retailers in late March and only a small number such as garden centers reopened last month.
Other stores in England were permitted to reopen on Monday subject to restrictions.
Sales at non-food stores last month increased by 24 percent, but were still 42 percent down on a year earlier, with clothes stores the hardest-hit category, down by more than 60 percent.
Fuel sales jumped by 49 percent as people in England got back in their vehicles.
Online sales rose to a third of all spending, a new record.
The Office for National Statistics data also laid bare the scale of the hit to Britain’s public finances as a result of the government’s huge increase in spending, much of it on its job retention scheme.
Public sector net borrowing last month hit ￡55.2 billion (US$68.54 billion) — a record high after April’s reading was revised down to ￡48.5 billion from ￡62.1 billion.
Last month’s figure was nine times bigger than the deficit in the same month last year.
“The best way to restore our public finances to a more sustainable footing is to safely reopen our economy so people can return to work,” British Chancellor of the Exchequer Rishi Sunak said.
A measure of public sector debt edged above 100 percent of economic output for the first time since 1963, when Britain was still paying off the costs of World War II, reflecting the record contraction of the economy in April.
In April and last month, borrowing stood at ￡103.7 billion, ￡87 billion more than in the same period last year.
Forecasters at the Institute for Fiscal Studies and Citi predicted Britain would still be borrowing significantly in five years’ time.
SEASONAL WEAKNESS: The combined revenue of the top 10 foundries fell 5.4%, but rush orders and China’s subsidies partially offset slowing demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) further solidified its dominance in the global wafer foundry business in the first quarter of this year, remaining far ahead of its closest rival, Samsung Electronics Co, TrendForce Corp (集邦科技) said yesterday. TSMC posted US$25.52 billion in sales in the January-to-March period, down 5 percent from the previous quarter, but its market share rose from 67.1 percent the previous quarter to 67.6 percent, TrendForce said in a report. While smartphone-related wafer shipments declined in the first quarter due to seasonal factors, solid demand for artificial intelligence (AI) and high-performance computing (HPC) devices and urgent TV-related orders
BYPASSING CHINA TARIFFS: In the first five months of this year, Foxconn sent US$4.4bn of iPhones to the US from India, compared with US$3.7bn in the whole of last year Nearly all the iPhones exported by Foxconn Technology Group (富士康科技集團) from India went to the US between March and last month, customs data showed, far above last year’s average of 50 percent and a clear sign of Apple Inc’s efforts to bypass high US tariffs imposed on China. The numbers, being reported by Reuters for the first time, show that Apple has realigned its India exports to almost exclusively serve the US market, when previously the devices were more widely distributed to nations including the Netherlands and the Czech Republic. During March to last month, Foxconn, known as Hon Hai Precision Industry
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and the University of Tokyo (UTokyo) yesterday announced the launch of the TSMC-UTokyo Lab to promote advanced semiconductor research, education and talent development. The lab is TSMC’s first laboratory collaboration with a university outside Taiwan, the company said in a statement. The lab would leverage “the extensive knowledge, experience, and creativity” of both institutions, the company said. It is located in the Asano Section of UTokyo’s Hongo, Tokyo, campus and would be managed by UTokyo faculty, guided by directors from UTokyo and TSMC, the company said. TSMC began working with UTokyo in 2019, resulting in 21 research projects,
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) yesterday expressed a downbeat view about the prospects of humanoid robots, given high manufacturing costs and a lack of target customers. Despite rising demand and high expectations for humanoid robots, high research-and-development costs and uncertain profitability remain major concerns, Lam told reporters following the company’s annual shareholders’ meeting in Taoyuan. “Since it seems a bit unworthy to use such high-cost robots to do household chores, I believe robots designed for specific purposes would be more valuable and present a better business opportunity,” Lam said Instead of investing in humanoid robots, Quanta has opted to invest
RSS