Poor data is a threat to UK’s green shoots
A HOST of poor data released yesterday cast doubt over the prospects of Britain’s fragile economic recovery. The figures caused the pound to slip to a one-week low against the euro and gilt yields to edge higher.
Retail sales fell unexpectedly in May by 0.6 per cent after an upbeat April thanks to a late Easter and warm weather. The Office of National Statistics (ONS) said yesterday the total volume of retail sales declined by 1.6 per cent in May compared to the same period – a bumper month – last year.
The fall in May on a monthly basis was caused by a 1.4 per cent drop in retail sales at predominantly non-food stores, while food stores saw sales volume rise by 0.3 per cent.
Gross mortgage lending data for May from the Council of Mortgage Lenders (CML) also disappointed, falling 58 per cent from May 2008. An estimated £10.3bn was lent in May, a two per cent decline from the £10.5bn in April.
But CML economist Paul Samter said it is likely that a moderate improvement in house purchase lending was offset by low remortgaging volumes.
Consumer lending still remains very weak according to figures announced yesterday by the Bank of England, suggesting that government measures to boost bank lending have yet to feed through fully. April data showed the weakest flow of net lending to businesses since June 2000 and net flows of consumer credit remained weak.