Is the post-lockdown rise in consumer spending already running out of steam? We’ll get a clue in next Friday’s official retail sales numbers. These could show that although sales volumes rose in July they are below April’s levels. Granted, this excludes spending on things like some home improvements, pubs, restaurants and cars (though sales of the latter are also down), but it might suggest that the savings we built up during the pandemic are not being run down as much as expected.
The counterpart to private sector savings staying high is that government borrowing will stay high. Friday’s figures will show that the government has borrowed around £80bn so far this financial year. Though well down on the £139.7bn the government borrowed in the same period last year, this is still very high by normal standards.
We should, though, see another drop in unemployment next week. Tuesday’s numbers could show that the official unemployment count has fallen below 1.6 million, or 4.7 per cent of the workforce. However, there are also 1.8 million people outside the labour force who want a job, and the rate is expected to climb when the furlough scheme ends.