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Hopes of British rebound premature
By Robert Barr |
June 19, 2009, Friday
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Print Edition
Print Edition
RETAIL sales and mortgage lending in Britain dropped in May, dampening hopes that a recovery was under way, while government borrowing hit a record high due to the cost of massive stimulus measures, official data showed yesterday.
Retail sales fell 0.6 percent between April and May as clothing and footwear sales slumped by 1.9 percent, the Office for National Statistics said. Sales for the March-May quarter were 0.6 percent higher than a year earlier, the lowest growth rate since the end of 1995.
Gross mortgage lending fell 2 percent in May to 10.3 billion pounds (US$16.8 billion), the Council of Mortgage Lenders said. The total was 58 percent below the May 2008 figure, the council said.
Public sector borrowing, meanwhile, hit a record 19.9 billion pounds in May, the largest figure for the month since the ONS began keeping records in 1993. The government is taking on a heavy debt burden to fund the massive stimulus packages it launched during the financial crisis to help the economy and the banking sector.
May's borrowing raised the national debt to 774.8 billion pounds, about 55 percent of gross domestic product and the highest proportion in more than three decades.
The government has projected a deficit of 175 billion pounds for the current fiscal year which began in April.
The figures, which follow weeks of slightly better economic indicators, suggest hopes of an economic recovery in Britain may be premature.
"We wouldn't be surprised if this marked the start of a period of rather weaker sales growth than of late," Vicky Redwood, economist at Capital Economics, said of the retail sales data.
Retail sales fell 1.6 percent compared to May 2008, which was a particularly strong month.
For the March-May quarter, the ONS said sales by household goods stores fell 7.3 percent, while sales at predominantly food stores eked out a gain of 0.2 percent.
Retail sales fell 0.6 percent between April and May as clothing and footwear sales slumped by 1.9 percent, the Office for National Statistics said. Sales for the March-May quarter were 0.6 percent higher than a year earlier, the lowest growth rate since the end of 1995.
Gross mortgage lending fell 2 percent in May to 10.3 billion pounds (US$16.8 billion), the Council of Mortgage Lenders said. The total was 58 percent below the May 2008 figure, the council said.
Public sector borrowing, meanwhile, hit a record 19.9 billion pounds in May, the largest figure for the month since the ONS began keeping records in 1993. The government is taking on a heavy debt burden to fund the massive stimulus packages it launched during the financial crisis to help the economy and the banking sector.
May's borrowing raised the national debt to 774.8 billion pounds, about 55 percent of gross domestic product and the highest proportion in more than three decades.
The government has projected a deficit of 175 billion pounds for the current fiscal year which began in April.
The figures, which follow weeks of slightly better economic indicators, suggest hopes of an economic recovery in Britain may be premature.
"We wouldn't be surprised if this marked the start of a period of rather weaker sales growth than of late," Vicky Redwood, economist at Capital Economics, said of the retail sales data.
Retail sales fell 1.6 percent compared to May 2008, which was a particularly strong month.
For the March-May quarter, the ONS said sales by household goods stores fell 7.3 percent, while sales at predominantly food stores eked out a gain of 0.2 percent.
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