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.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said that its investment plan in Arizona is going according to schedule, following a local media report claiming that the company is planning to break ground on its third wafer fab in the US in June. In a statement, TSMC said it does not comment on market speculation, but that its investments in Arizona are proceeding well. TSMC is investing more than US$65 billion in Arizona to build three advanced wafer fabs. The first one has started production using the 4-nanometer (nm) process, while the second one would start mass production using the
A TAIWAN DEAL: TSMC is in early talks to fully operate Intel’s US semiconductor factories in a deal first raised by Trump officials, but Intel’s interest is uncertain Broadcom Inc has had informal talks with its advisers about making a bid for Intel Corp’s chip-design and marketing business, the Wall Street Journal reported, citing people familiar with the matter. Nothing has been submitted to Intel and Broadcom could decide not to pursue a deal, according to the Journal. Bloomberg News earlier reported that Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is in early talks for a controlling stake in Intel’s factories at the request of officials at US President Donald Trump’s administration, as the president looks to boost US manufacturing and maintain the country’s leadership in critical technologies. Trump officials raised the
‘SILVER LINING’: Although the news caused TSMC to fall on the local market, an analyst said that as tariffs are not set to go into effect until April, there is still time for negotiations US President Donald Trump on Tuesday said that he would likely impose tariffs on semiconductor, automobile and pharmaceutical imports of about 25 percent, with an announcement coming as soon as April 2 in a move that would represent a dramatic widening of the US leader’s trade war. “I probably will tell you that on April 2, but it’ll be in the neighborhood of 25 percent,” Trump told reporters at his Mar-a-Lago club when asked about his plan for auto tariffs. Asked about similar levies on pharmaceutical drugs and semiconductors, the president said that “it’ll be 25 percent and higher, and it’ll
CHIP BOOM: Revenue for the semiconductor industry is set to reach US$1 trillion by 2032, opening up opportunities for the chip pacakging and testing company, it said ASE Technology Holding Co (日月光投控), the world’s largest provider of outsourced semiconductor assembly and test (OSAT) services, yesterday launched a new advanced manufacturing facility in Penang, Malaysia, aiming to meet growing demand for emerging technologies such as generative artificial intelligence (AI) applications. The US$300 million facility is a critical step in expanding ASE’s global footprint, offering an alternative for customers from the US, Europe, Japan, South Korea and China to assemble and test chips outside of Taiwan amid efforts to diversify supply chains. The plant, the company’s fifth in Malaysia, is part of a strategic expansion plan that would more than triple
RSS