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On April 28, 2025, people go to Trafalgar Square.
Adrien Filon | Nurphoto | Gets the image
It was rare for a number of positive economic news to emerge from the UK in 2025, but in particular this week gave Britain to three reasons to be optimistic.
Friday data signal about an unexpected positive impulse in the country’s economy with retail sales In April, it increased much better than expected, 1.2%And the GFK consumer trust index shows improvement in mood.
Sterling scored 0.6% to the US dollar after the figures were published on Friday to trade approximately $ 1.35.
The combination of two positive figures on Friday caused expectations and logic for some economists. Economic activity is expected in April allegedly shown to reduce, partly thanks to the global trade war of US President Donald Trump.
“Well, it disputes the idea of a cautious consumer,” said Rob Wood, the UK chief economist in Pantheon Macroeconomics, adding that a number of factors do not affect politicians and businesses, play.
“Given this, the official sales growth looks too good to be true, probably because the seasonal adjustment will not be able to properly control for later Easter this year,” Wood added. “Undoubtedly, the weather helped a lot, and in March and April registered the sunlight from the beginning of the records.”
Taken up in isolation, retail data on Friday and consumer trust data may indicate growth in the current quarter. However, the British electricity regulator added to positive sentiment, saying on Friday that in July, electricity prices fell by 7%. This can potentially improve costs in other sectors in the coming months.
“This is definitely an improvement for housekeeping costs, with monthly accounts to fall by about 11 pounds,” said Eli Henderson, Investec economist.
Meanwhile, a number of positive elements can potentially run into the UK’s economic growth in the second quarter as a whole, according to Alan Monk, the Great Britain’s chief economist, which predicts 0.6% annual profit.
“At such a high speed savings, further improvement of confidence can potentially unlock further income of consumers,” the JP Morgan recording on Friday’s customer recording. “High inflation, softer wage growth and poor employment claim the continuation of this trend. But the growth of confidence in May corresponded to a significant drop in unemployment, a decrease in inflation expectations and an increase in expenses.”
Great Britain’s forecast for the last year. The country has grabbed such failures an unexpected economic reduction and increased concern for financial costs, as well as seeing more positive data and an agreement of iconic trade deals US. India and I.
Earlier this week official data showed the economy In the first quarter of 2025 grew by 0.7% – Although this happened as it happens Inflation has grown up to 3.5% In April. Last week is another one Print data They showed that the average income in the UK increased by 5.9%annually.
On Friday, the data combination meant that economists shared about what the latest data for a long -term economic picture in the UK.
Alex Kerr, the UK economist at Capital Economics, warned that “the sun does not shine (UK) the retail sector forever.”
“Although for the first time since 2015, with the exception of the pandemic, the retail sales increased for four consecutive months, an impressive rise of 1.2% m/m is largely due to the unusually warm weather,” he said in a note sent shortly after the figures were published.
“This increase will not last. So, despite the fact that consumer confidence in May has increased slightly, we suspect that the growth of retail sales will slow down in the coming months.”
“Oppressed” British resort to retail therapy
While most economists viewed a slight increase in consumer confidence in May as a positive signal for the next quarter economic growth, others suggested that since the overall mood remains below the pandemic level, there may be a connection between costs and moods.
“The oppressed British consumers have resorted to retail therapy to cope with their economic and financial troubles,” said Andrew Vishart, the senior economist in Berenberg.
Instead, Visarta said the combination of the pandemic, and subsequent inflation and the increase in the interest rate made consumers attract their finances.
“Households have increased the level of savings (the share of household income) to a level that was previously invisible by periods of mass unemployment,” Vishart added.
According to the economist, having stabilized their balances in the bank and ensuring the pay increase, consumers are waiting for a more stable interest rate and price conditions.
Intuitively thinks that additional costs means that the Bank of England is likely to have bets on the rest of the year than to reduce, he added.
Janet Mui, head of the market analysis at the Wealth RBC Brewin Dolphin manager, said on Friday morning that when wages exceeding inflation, UK’s household is more generous. However, she warned that the state finance state “remains a restriction”.
“More than borrowing costs and costs may be reduced,” she explained. “This creates some medium -term risks for the UK amid constant uncertainty in how the global trade situation will be resolved.”
