Recovery off to a good start, but economy not out of the woods yet

Not all of consumption spending goes on retail. The hospitality industry has had an even tougher time of things, with restaurants and pubs only allowed to reopen from 4 July.

But the extreme popularity of the Eat Out To Help Out scheme should have given them a boost in August and brought more people onto the high street with it.

More than nine-in-10 people have heard of the £10 discounts, according to the Office for National Statistics, which represents a staggeringly successful cut-through to the general public’s consciousness.

By the middle of August more than 50pc said they had either used the special offer or were likely to do so.

Business surveys also show punchy growth for August, with the PMI from IHS Markit rising to its highest level since 2013.

It points to a broad-based recovery with the manufacturing and services sectors both growing strongly, as businesses report surging demand from consumers and from corporate clients.

The index aims to show growth from month to month, so reopening businesses should automatically boost the score, and does not mean production is back to its pre-Covid levels.

The surveys contain a warning, too. Despite growth from the lockdown lows, business activity is still insufficient for companies to keep all of their staff.

As a result the employment index remains deep in the red, indicating steady redundancies that could in turn end up sapping demand and weakening the recovery.

Similarly, the retail numbers show the challenges ahead. For instance, clothes shopping is still down by about a quarter, leaving many high street stalwarts in trouble.

And although the public finances might be in better shape than feared, £2 trillion is still a major debt.

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