London’s Oxford Street during lockdown. Shutterstock.
British households have cut debit and credit card spending sharply and the proportion of workers on furlough has risen to its highest since July after new coronavirus lockdown restrictions came into force this month.
For a second week running, a new official data series showed spending on credit and debit cards was 35 percent below its level in February 2020, at the start of the pandemic.
The figures are based on transaction data collected by the Bank of England which the Office for National Statistics (ONS) class as ‘experimental’, and are not seasonally adjusted.
Schools, non-essential retailers and most other businesses were closed to the public across England on January 5 and similar measures were taken elsewhere in the United Kingdom to slow a surge in coronavirus that has cost over 100,000 lives so far.
Most economists think Britain’s economy will shrink in the first quarter of this year due to the lockdown and disruption from new post-Brexit trading arrangements, though the decline is likely to be much less than the 19 percent slump in the first lockdown.
The ONS said businesses reported 17 percent of their staff were on furlough between December 28 and January 10, the highest proportion since July.
Separate tax office data, also released on Thursday, showed a total 3.8 million jobs furloughed as of December 31, just below a peak of 4.1 million on November 11 during a four-week England-wide lockdown and well below a record of 8.9 million in May.
The furlough programme had cost more than 46 billion pounds ($63 billion) as of December 13, making it Britain’s most expensive single economic support measure of the crisis.
The programme is due to expire on April 30, and finance minister Rishi Sunak has said he will set out future job support measures in his annual budget on March 3.
Government forecasters expect public borrowing to approach 400 billion pounds this year, including more than 280 billion pounds of COVID-related spending.
By David Milliken; editing by James Davey.