UK economic activity improved over the summer months as coronavirus restrictions eased and government support measures underpinned consumer spending.
The recovery has helped the UK narrow the gap on those continental European countries where restrictions were eased earlier. But official figures are often out of date even before they are published so the Financial Times has selected the most representative data available to track the fast-changing economic situation and the sectors hit hardest by the pandemic.
The charts will be updated as fresh figures are published. All the statistics are experimental and not as comprehensive as official figures, so conclusions should be drawn cautiously.
August 28: Added data on the uneven geography of the recovery, and the impact of the “eat out to help out” scheme
August 5: Replaced restaurant bookings data with spending and footfall
August 2: Added furlough data to “reopening of business” section
Consumer spending, which comprises almost two-thirds of the UK’s gross domestic product, fell sharply in March as it became apparent the UK was heading for a lockdown. But there were some bright signs in August when spending exceeded last year’s level for the first time since the outbreak, according to Fable Data, which tracks card payments across the UK.
Clothing sales picked up in the summer as Britons began spending more time outdoors and in social settings. Similarly, spending in the hospitality sector returned to normal levels for the time of year after a prolonged dip. The recovery began in early July, when pubs and restaurants were allowed to reopen their doors, and was given a big boost by the government’s popular “eat out to help out” discount scheme, which ended on August 31.
The reopening of restaurants and pubs may also explain the slight dip in spending on groceries in July, as some consumers swapped home-cooked dinners for dining out. But spending on air travel remains depressed, as the UK’s quarantine policies and perceptions of the risks of contracting the virus from flying have hit demand for overseas tourism.
An uneven recovery
The UK’s big cities, particularly London, are not seeing the same pick-up in footfall experienced by smaller cities and towns, according to an analysis of anonymised mobile phone data by the public policy institute Centre for Cities and location tracking company Locomizer.
Office workers and commuters typically make up a large portion of high street footfall in metropolitan areas, but most of them were either still working from home or on holiday in mid- to late August.
In contrast, workers in smaller cities and towns are more likely to have jobs that do not suit homeworking, while a trip to the high street is often a walk or a short drive away.
Reopening of businesses
Across the UK, the economy is now almost fully open, a drastic improvement from early April when more than one in five businesses were shut, according to the Business Impact of Coronavirus Survey run by the Office for National Statistics.
As activity has picked up, the proportion of businesses reporting reduced turnover has shrunk, thought it remains high in sectors such as arts and transport.
The data also show the first signs of permanent job losses as the government begins to phase out the level of support it pays under the furlough scheme. The ONS survey estimated 7 per cent of workers in the hospitality sector had been made redundant by mid-August.
The latest available official jobs figures are from the end of June, which showed there were still almost 7m people furloughed down from 9m three months earlier. As unemployment data come with such a long delay, vacancies offer earlier indicators of the state of the market.
The latest weekly statistics from the ONS collected with Adzuna, the online job search engine, suggest there has been some recent improvement, with the transport and logistics sector seeing particularly steep hiring growth as the economy reopened and companies reactivated supply chains.
Retail sales have recovered, according to official statistics, in part due to the shift towards online sales, a trend that the pandemic has accelerated.
Given the boost that the lockdown has given to internet shopping, it follows that footfall, which records the number of people in high streets and shopping centres across the UK, is lagging. Numbers are still well down compared with a year ago, according to data from the retail consultancy Springboard.