Rush to shop is fuelled by pent-up savings, says Bank of England

The economy will bounce back like a coiled spring after people rushed back to pubs, shops, hairdressers and gyms yesterday, experts claimed.

Restrictions were eased for the first time since early January, when the UK entered its third lockdown and people were forced to stay at home for all but essential trips.

Such was the excitement and pent up demand that people queued up outside shops from 5.30am despite the freezing cold, and snow in some parts of the country.

Lockdown ends: Bank of England chief economist Andy Haldane (pictured) believes Britain is set for a spending bonanza over the coming months

Figures showed that visits to high streets, shopping centres and retail parks were up 218.2 per cent from last week and a whopping 505 per cent from 2020.

Unsurprisingly, retail parks, with larger stores and more space, were the preferred destination, according to Springboard, the customer activity data provider.

It is estimated that UK households have built up £250billion in savings during lockdown, which Bank of England chief economist Andy Haldane believes could lead to a spending bonanza over the coming months. 

Haldane has been an eternal optimist during the crisis, telling people they must reject the economics of Chicken Licken. 

Getting people splashing the cash again is crucial for Britain’s recovery as 2020 was the worst year for more than three centuries, with a 9.8 per cent decline in GDP.

Industry lobby group, the British Retail Consortium, estimates UK stores lost £27billion in sales over the three lockdowns.

Top economists said that the economy is expected to bounce back rapidly over the summer months.

Samuel Tombs, economist at economic research consultancy Pantheon Macroeconomics, said: ‘Yesterday was a positive start and we are moving in the right direction. The main driver seems to be people desperate to get a haircut.

‘There’s still a way to go to pre-Covid spending levels but the recovery is starting to come through.’

Michael Grady, chief economist at insurer Aviva, added: ‘The Covid pandemic is passing, and successful rollouts of vaccination programmes are allowing economies to reopen. Pent-up demand, large savings buffers and ongoing fiscal and monetary policy support will all help boost the recovery.’

But despite the renewed optimism, share prices in the retailers and pub chains fell on the London stock exchange. 

Associated British Foods, which owns Primark, was down 0.9 per cent, or 21p, to 2463p and retail giant Next lost 2.4 per cent, or 196p, to 8100p. 

Pub shares fared little better and Marston’s fell 4 per cent, or 4.05p, to 96.25p, while Mitchells & Butlers slid 3.3 per cent, or 10.8p, to 313.8p.

Brokers warned that the cold weather could put many shoppers off, adding that not many people will be prepared to drink pints of lager in the snow.