- Alan Clarke, an economist at Scotiabank
British retail sales soared the most in more than two years in January, led by demand for clothing and computers. Total volumes surged 2.3% in the reported month from December, according to the Office for National Statistics. That was much stronger than the 0.8% gain expected by economists and represented the biggest monthly increase since December 2013. Measured on an annual basis, sales soared 5.2%, marking the 33rd straight month of growth. Low inflation, driven by plunging commodity prices, has helped to boost households' spending.
A separate report showed the UK public sector net borrowing excluding banks received a robust boost in the beginning of the year, led by a typical increase of tax receipts in January. Public sector net borrowing excluding banks came in at a surplus of 11.2 billion pounds, which is 1 billion pounds, or 9.7%, above the level seen during the same month a year ago, and the largest January surplus since 2008. A surge in tax receipts at the start of the year was driven mainly by an increase in income tax-related payments, surging by 6.5% to 30.2 billion pounds. Furthermore, VAT receipts, social contributions, and a rise in corporation tax receipts also helped boost the government's coffers.
© Dukascopy Bank SA