Retail sales and gross mortgage lending in Britain declined in May, dampening hopes that recovery was under way, while government borrowing hit a record high, according to reports released Thursday.
Retail sales fell more than expected in May, dragged down by poor sales of clothing, footwear and by department stores, data from the Office for National Statistics showed. The volume of retail sales fell 0.6% from a month earlier and by 1.6% on a yearly basis.
In April, sales rose 0.9% from a month earlier by 2.6% from a year earlier.
The decline was in line with other weak retail sales data, while an ONS statistician said Thursday that the annual measure of sales was also impacted by the particularly large rises in May last year due to good weather.(…)
The retail-sales and public-finance data sent the British pound falling against other major currencies. The pound sank most sharply against the dollar, losing over 1% to hit a session low of $1.6190, while the euro rose by a slightly smaller degree to reach £0.8605. (…)
The Council of Mortgage Lenders Thursday said gross mortgage lending — which includes both lending for house purchase and remortgage — fell 2% in May to £10.3 billion. The total was 58% below the May 2008 figure, the council said.(…)
"Lending volumes appear to have stabilized at extremely low levels, but the weak labor market and lenders’ limited access to funding will constrain activity for some time yet," he said. "Underneath the headline gross lending figure, it’s likely that a moderate improvement in house purchase lending in May has been offset by very low remortgaging volumes as borrowers stay with existing deals," he added.
Data from the Confederation of British Industry Thursday showed U.K. industrial output declined for the 12th consecutive month in June as export orders slumped to their weakest level for more than a decade.
The headline output balance in the CBI’s latest Industrial Trends Survey was unchanged in June at -17. However, the balance for export orders dropped to -52 from -46 in May, the weakest level since October 1998.
"Export orders are no better than they were a few months ago, reflecting the continued weakness of overseas demand for U.K.-made goods," Ian McCafferty, chief economic advisor to the CBI, said in a statement. "As such, conditions for U.K. manufacturers remain challenging with volumes of total orders still at very weak levels."
The survey of 566 manufacturers between May 26 and June 10 showed the gauge of the sector’s total order book improved only slightly to -51 in June from -56 in May.
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