U.K had 35% Plunge in Consumer Spending, New Card-Purchase Data Shows

U.K card purchases went down by 35% below pre-pandemic levels in the second week of January, according to the Office for National Statistics, press release. Spending on credit and debit cards was 4% higher than in February, the month before the pandemic struck.

• The decline in consumer spending reflects the impact of tightened lockdowns in controlling the coronavirus and raises the risk of double-dip contraction in the first quarter.
• Retail footfall was a third of the year-earlier period last week while the proportion of the workforce on furlough leave in which the government subsidizes their wages rose 2 points to 16%.
• Some 3% of firms had permanently shut down between December 28 and January 10
• More than a quarter of firms had a turnover fall by at least a fifth compared to normal levels.
• A separate central bank survey showed potential higher default rates for loans to households in the first quarter, while small businesses faced difficulties obtaining credit at the end of 2020
• Bank of England Governor Andrew Bailey said on Wednesday that the economy is adapting to restrictions, and lockdowns don’t seem to have a big impact as they did previously.
• Attention now shifts to retail sales figures, set to be released on Friday for December, when shops were open for two weeks during the loosening of restrictions.

U.K stocks are currently declining as the pound gains. FTSE 100 is down 0.30%, GBPUSD is up 0.58%