LONDON (Reuters) – British retail sales rocketed last month as consumers prepared for a partial lifting of coronavirus lockdown restrictions, according to official data which also showed record peacetime government borrowing.
Sales volumes leapt by 5.4% in March from February, the Office for National Statistics said, with clothing stores benefiting especially.
Economists polled by Reuters had expected a month-on-month increase of 1.5%.
The ONS said the data reflected “the effect of the easing of coronavirus restrictions on consumer spending”.
“March’s strong rise in retail sales showed that the economy made a fair bit of progress even before non-essential retailers reopened in April,” Paul Dales, an economist with Capital Economics, said.
Separate data showed Britain’s government borrowed 303.1 billion pounds ($420.1 billion) in the financial year which ended last month, a surge of 246 billion pounds on the previous year and the biggest share of the economy in peacetime.
Borrowing stood at 14.5% of economic output, the highest such ratio since 1946, after World War Two, when it was 15.2%.
The numbers reflected the surge in public spending and tax cuts to offset the economic hit from the COVID-19 pandemic.
Britain’s economy slumped by almost 10% last year, its biggest collapse in more than three centuries, but it is expected to grow by more than 5% in 2021 and 2022, according to the International Monetary Fund.
The Bank of England is waiting to see the extent to which households spend their lockdown savings as it assesses how long it needs to keep its huge stimulus plan in place.
British consumer sentiment rose to its highest since the start of the pandemic this month, a closely watched survey showed on Friday, but the increase was smaller than economists had expected.
The ONS said retail sales were up 7.2% compared with March 2020 when the pandemic was spreading in most Western economies.
The ONS said the share of shopping done online slipped from a record high in February to 34.7% in March.
Many retailers have expanded their online operations quickly in response to three lockdowns over the past year.
(Writing by Andy Bruce and William Schomberg; Editing by Guy Faulconbridge)
