UK Retail Economic Briefing Report summary
February 2021
Period covered: Period covered: 01 Jan 2021 – 31 Jan 2021
Note: Reporting periods are either one month or two months behind the current month as standard.
Gross Domestic Product
Annual GDP fell by 9.9% in 2020, the largest yearly decline on record.
Despite two consecutive quarters of growth, UK GDP remains 6.6% below where it was in Q4 2019, prior to the pandemic.
GDP is forecast to grow by 4.4% in 2021, according to independent forecasts form the Treasury.
Inflation
CPI inflation rose marginally in January, up by 0.1 percentage points to 0.7% year-on-year, and above market expectations of remaining at 0.6%.
Looking ahead, inflation is expected to rise in coming months amid rising commodity prices and supply chain pressures
Average regular pay (excluding bonuses) rose by 4.1% year-on-year in the three months to December.
Retail Sales Growth
Retail sales fell by 1.7% in January, year-on-year, according to the Retail Economics Retail Sales Index (value, non-seasonally adjusted, exc. Fuel).
There was a sharp polarisation between the performance of food (+9.1%) and non-food (-12.2%).
However, there was a significant shift towards online as consumers reverted seamlessly to lockdown shopping behaviour.
Consumer Confidence
GfK’s Consumer Confidence measure improved by five points in February to -23 – the strongest rise for a year but still 16 points lower than a year earlier.
All measures within the index improved compared to the previous month, except for perceptions around personal finances over the past year.
Expectations for the general economic situation over the next 12 months improved markedly to -30, 14 points high than in January 2021 and just nine points lower than a year ago.
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Source: Retail Economics