British Distributive Trades Rise Sharply
The Confederation of British Industry has just published the it’s April Distributive Trades report. This measure of short term trends in retail and wholesale distribution sector has come in at 30, this is sharply up from last months 13 and easily beat the market consensus estimate for a reading of 17.
The retail sector in the UK is leading the recovery for this economy. This is despite a disappointing April reading on the Retail Sales indicator, which can be largely explained due to timing of the Easter break. It has been acknowledged that the consumer lead recovery risks masking weaknesses in other parts of the UK economy and so market attention is turning to under performing areas such as manufacturing and investment.
One area of the British recovery that is seriously troubling the markets is the size of the countries current account deficit, this has recently hit record levels but is now showing signs of coming back in line. The financial year to April 2014 looks set to show that UK government borrowing for the period was just over £107Bn, this is a massive figure but compares very favorably to the previous years £116Bn of public debt accumulation.
The trend on this debt reading is very importantly moving in the right direction, the current UK government has publicly stated that it intends to eliminate the need for borrowing by the end of the 2018 financial year.
There is a caveat that the current £107Bn figure is at this point just an estimate, there is obviously scope for minor adjustments before the final number is published. If however this current borrowing figure holds then the Chancellor, George Osbourne, will have met the stated target for this year which would provide a lot of confidence that the longer term plan is very much on track.
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