Triple blow of good economic news boosts hope for summer


Britain’s economy is recovering from Covid-19 faster than expected, a triple dose of good news showed today.

The latest figures show the government borrowed £ 303 billion through March, the highest level since the end of World War II.

While the amount borrowed is undeniably high, it is well below the £ 394 billion forecast last November.

And UK retail sales continued to rebound in March, up 5.4% from February, with garden centers, butchers and bakers proving to be popular, the data showed.

These numbers are valid before non-essential stores reopen, suggesting that April’s statistics are likely to be strong.

Paul Dales of Capital Economics said: “We believe that an increase in retail sales in April will mark the start of a rapid economic recovery that could mean additional tax hikes and spending cuts that most fear. not materialize. “

Also today, there was a rise in the April composite flash PMI, suggesting that momentum is building. TThe increase in the IHS Markit / CIPS activity measure from 56.4 in March to 60.0 in April was also better than expected.

Darren Morgan, ONS Director of Economic Statistics, added: “The approach of spring has drawn people to garden centers, which have had a good month, while clothing sales have come back to life as people search. to update their wardrobe.

Chancellor Rishi Sunak has benefited from very low borrowing costs. But since much of the debt is held by the Bank of England, if the Bank itself raises interest rates, the costs of servicing the debt immediately rise.

But statistics show that central government debt interest payments stood at £ 38.8bn through March 2021, £ 9.3bn less than a year ago. year.

As a percentage of GDP, the loan is 14.5%. It reached 15.2% in 1946.

Capital Economics said, “We believe that the phased reopening of the national economy will push GDP from 7.8% below its pre-pandemic level in February to about 2-3% below in July. “

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