UK workers begin to come off furlough as consumer spending rises

ONS says 83% of businesses are now trading, a rise of six percentage points since late March

Workers are beginning to come off furlough as a surge in spending by UK consumers allows businesses to start reopening after their long winter shutdown, according to the latest official snapshot of the economy.

In its weekly digest of the latest indicators of activity, the Office for National Statistics (ONS) reported that the proportion of the workforce on furlough of all businesses dropped from 17% to 13% during April.

The ONS said 83% of businesses were now trading, a rise of six percentage points since late March, when tighter lockdown restrictions were in force.

Reopening of non-essential stores prompted a surge in spending on what the ONS describes as delayable goods – items such as clothing and furniture. Card payments for this category of expenditure rose by 21 percentage points for a second successive week in the seven days ending 21 April and stand at 110% of their pre-pandemic level.

The percentage of shoppers purchasing goods other than food or medicines rose by 8 points to 28% in the week ending 25 April, the ONS added.

Overall credit and debit card payments showed a more modest pick-up, rising by seven points to 98% of where they stood in February 2020.

Under the government’s roadmap for unlocking the economy, from 12 April non-essential stores reopened and pubs and restaurants were allowed to serve customers outside. The ONS has been tracking progress using data from a variety of sources, including the Bank of England for card payments, Springboard for retail footfall, OpenTable for restaurant bookings and Adzuna for online job vacancies.

The ONS said the volume of UK online job adverts was at 103% of its average February 2020 level on 23 April 2021 – an increase of four percentage points from the previous week and the first time it had exceeded its February 2020 average level since 6 March 2020.

The Bank of England closely monitors the weekly ONS health checks and will next week use its own quarterly update on the state of the economy to raise its growth forecasts.

Despite the generally upbeat picture revealed by the ONS there was some evidence of the damage caused by a year in which there have been tough restrictions on businesses imposed across the four nations of the UK.

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The ONS said that while some businesses were reopening, others were going to the wall. It reported 5,676 voluntary dissolution applications in the week to 23 April 2021, a 7% increase on the previous week (5,325) and a 14% higher rise on the equivalent week of 2019 (4,977).

With the weather cold, the ONS figures also suggested that the novelty of returning to the pub had worn off for some people. Latest figures show seated reservations last Saturday running at 62% of the equivalent Saturday two years ago, down from 79% on Monday 12 April, when there was an initial rush of returning customers.


Larry Elliott Economics editor

The GuardianTramp

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