Retail sales were a whopping 6.9% higher in April than in the same month last year, making this the biggest annual rise in 10 years. ‘Caloo, calay,’ shouted retailers, as the Office for National Statistics also pointed out that month-on-month sales rose by 1.3%, way up on forecasts of a 0.5% rise.
So what went well? Well, food sales, for a start - hardly surprising given April’s spate of nice weather. They rose 6.3% on last year and (rather pleasingly) 3.6% on March, while non-food sales rose by 6.5% year-on-year, although they dropped 0.4% on the month. Still: it’s the 14th consecutive quarterly rise in retail sales. We don’t hear anyone complaining.
Now obviously, this is a good thing for the economy: more spending equals more dosh going through high streets. But the worry is that people are waving their credit cards at anything with a price tag, which means a) they’re not saving and b) they’re borrowing more than they can afford.
In December, the Bank of England published figures showing £23bn had been taken out of long-term savings during 2013, which is about £900 per household. That’s the biggest drop in savings in 40 years. And in November, UK household debt hit £1.43tn, a record high.
So while MT firmly supports a Briton’s right to shop, we suggest caution when it comes to celebrating great retail sales. Remember what happened last time we all got used to spending other people’s money? It’s beginning to feel like we didn’t learn our lessons. Maybe it's finally time for that interest rate rise...