Right, time to wrap up. Here’s a quick recap.

Companies on both sides of the Atlantic have reported a surge in activity this month as lockdowns are eased.

In the US, the ‘flash’ composite PMI hit a record high, driven by a strong recovery in the services sector and continued rapid growth at factories. But price pressures are also at a record level.

It was a similar tale in the UK, where the PMI hit a fresh peak and business confidence reached a record.

Eurozone firms reported their fastest growth in three years, as vaccination programmes spurred demand.

The EC reported that eurozone consumer confidence has risen again.

Despite these signs of recovery, ECB president Christine Lagarde insists its too early to consider slowing its bond-buying stimulus.

European markets rallied, while the US dollar has also picked up this afternoon. US tech shares weakened, with investors favouring manufacturers, banks, oil companies and retailers.

US home sales dipped last month, as a shortage of properties hit the sector.

Bitcoin has been rocked by another warning from China, where the State Council vowed to crack down on Bitcoin mining and trading behaviour. It’s fallen back below $37,000, down over 7% today, at the end of a turbulent week.

Elsewhere, UK retail sales jumped much faster than expected this month as people rushed to clothes stores following the easing of restrictions.

In the corporate space, luxury goods maker Richemont beat expectations as jewellery sales surged....

... while rubbish collector Biffa is acquiring a rival bins collection and recycling business.

Calls for a wealth tax have intensified, after the number of UK billionaires hit a fresh record high.

Shares in UK subprime lender Amigo have fallen more than 34% in one day, amid fears that it could collapse if a controversial proposal to cap customer compensation claims is rejected by a UK court.

WeWork’s losses have quadrupled as the pandemic-driven move to flexible working drove a 30% plunge in customers at the troubled office-sharing company.

Nationwide has predicted that the UK housing price surge will continue...

The head of the International Monetary Fund have urged wealthy nations to back a $50bn (£35bn) mass global vaccination drive could provide a $9tn boost to the world economy.

The world’s richest nations have agreed to end their financial support for coal development overseas, in a major step towards phasing out the dirtiest fossil fuel.

And the blustery gales hitting the UK have helped windfarm turbines generate a record share of the the energy mix.

Have a lovely weekend! (weather permitting...) GW

The US dollar has rallied after today’s US PMI report showed American companies were growing ‘spectacularly fast’.

The news that output was surging, and that raw material shortage were pushing up prices, boosted the greenback. It has pulled the pound back down to $1.415, having hit $1.422 for the first time since February.

On Wall Street, traders piled back into companies which will benefit from the reopening of the economy. Aerospace manufacturer Boeing (+2.6%), investment bank Goldman Sachs (+1%) and construction equipment maker Caterpillar (+0.8%) were among the top risers on the Dow.

But tech stocks found themselves out of favour, with Apple (-1.4%) and Microsoft (-0.5%) among the fallers.

So while the Dow is up 106 points, or 0.3%, at 34,190, the tech-focused Nasdaq Composite is down 51 points, or 0.4% at 13,484.

Back in the equity markets, it was a rather subdued session in the City.

The UK’s FTSE 100 index of blue-chip shares closed just two points lower, at 7018, despite the flurry of strong economic data.

The energy, industrial and financial sectors rallied, but real estate, utilities, miners and consumer good and service providers dipped.

Telecoms firm BT (+3%) ended as top riser, followed by betting firm Flutter (+2%), jet engine maker/servicer Rolls-Royce (+1.9%) and airline IAG (+1.7%).

DIY chain Kingfisher (-4.3%) led the fallers. Yesterday it reported strong sales, but also cautioned that supply chain disruption could last six months.

Property companies also dipped, with developers British Land (-3.3%) and Land Securities (-1.7%) and online estate agent Rightmove (-2%) in the fallers.

Here’s Reuters take:

China will crack down on bitcoin mining and trading activities as part of efforts to fend off financial risks, the State Council’s Financial Stability and Development Committee said on Friday.

The country will also clamp down on illegal activities in the securities market, and maintain the stability of stock, bond and forex markets, the committee said in a meeting chaired by Vice Premier Liu He.

The statement, which comes just days after three Chinese industry bodies tightened a ban on banks and payment companies providing crypto-related services, marks a sharp escalation of moves against virtual currencies.

Liu is the most senior Chinese official to publicly order a crackdown on bitcoin, and it is the first time the state council has explicitly targeted crypto mining activities.

Bitcoin prices fell sharply again on the news and are on course for weekly losses of more than 15%, as is Etherium.

Bitcoin is taking another tumble, after a fresh call from Chinese authorities to crack down on mining and trading of the cryptocurrency.

CNBC have the details;

In a statement from Chinese Vice Premier Liu He and the State Council, authorities said tighter regulation is needed to protect the financial system.

The statement, released late Friday in China time, said it is necessary to “crack down on Bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field.”

This has knocked bitcoin down to around $37,000, down over 7% today, having been trading over $41,000 before the news from China hit the wires.

This is still higher than Wednesday’s lows, when bitcoin briefly plunged 30% to just $30,000 in a dramatic flash crash. That came after the People’s Bank of China warned financial institutions about accepting cryptocurrencies as payment or offering related services and products.

US companies posted “spectacular” growth this month as America’s economy continued its strong recovery.

Growth was driven by a surge in service sector activity as the economy reopened, while factory output also accelerated amid stronger client demand.

But the rebound is leaving factories struggling to complete work, due to lack of raw materials, and leading firms across the economy to hike their prices.

That’s according to the latest ‘flash’ PMI survey from IHS Markit, which shows the fastest service sector and manufacturing growth since its surveys began in 2009.

Private sector firms across the US “signalled an unprecedented expansion” in business activity in May, says Markit. It highlights that the US recovery is strengthening -- as we’ve already seen in the UK and across the eurozone today.

New orders rising quickened for the fifth month running in May as consumer confidence grew.

Export business rose strongly too -- at the fastest pace since the series covering both manufacturing and services began in September 2014.

But cost burdens also increased, with rate of input price inflation soaring to a new survey record high due to the rising commodity costs, travel, and personal protective equipment.

And this has forced many firms to hike their own prices at the fastest rate since at least 2009.

Markit says:

Commonly noted were increases in PPE, fuel, metals and freight costs amid significant supplier delays.

The steep rise in costs fed through to the sharpest increase in output charges since data collection began in October 2009, with record rates of inflation registered for both goods and services as soaring demand boosted firms’ pricing power.

Some manufacturers also reported that their supply chains struggled to keep pace with demand, leaving them short of the components and commodities they needed:

Subsequently, backlogs of work accumulated at the fastest pace since data collection for the series began 14 years ago, as firms were constrained by raw material shortages.

US firms also reported a “solid expansion in staffing levels”, although some said they were struggling to find workers:

While job creation was again seen in the goods-producing sector, the rise was the slowest for five months, linked in part to difficulties filling vacancies. Measured overall, employment rose for the eleventh straight month, but the rate of increase eased from April’s survey high

The survey found that:

• Flash U.S. Composite Output Index at 68.1 (up from 63.5 in April). Series record high.
• Flash U.S. Services Business Activity Index at 70.1 (up from 64.7 in April). Series record high.
• Flash U.S. Manufacturing PMI at 61.5 (up from 60.5 in April). Series record high.
• Flash U.S. Manufacturing Output Index at 58.1 (up from 57.2 in April). 4-month high.

Chris Williamson, chief business economist at IHS Markit, said America is set for strong economic growth this summer.

“The US economy saw a spectacular acceleration of growth in May, the rate of expansion of business activity soaring well above anything previously recorded in recent history as the economy continued to reopen from COVID19 restrictions.

The service sector saw an especially impressive surge in growth, beating all prior records by a wide margin, accompanied by another solid expansion of manufacturing output.

“Growth would have been even stronger had it not been for businesses often being constrained by supply shortages and difficulties filling vacancies.

With businesses optimistic about the outlook, backlogs of orders rising sharply and demand continuing to pick up both at home and in export markets, the scene is set for strong economic growth to persist through the summer.

No wonder luxury goods makers such as Richemont are doing well. The number of billionaires in Britain has hit a record high during the pandemic.

With wealth surging despite a year of economic turmoil, thanks to the central-bank fuelled surge in asset prices, calls for higher taxes on the ultra-rich are growing.

My colleague Jasper Jolly has the details:

There are 171 billionaires in the UK, 24 more than a year ago, according to an annual ranking compiled by the Sunday Times. It was the highest number in the 33 years of the rich list, as the combined wealth of billionaires in Britain grew by more than one-fifth.

The bosses of British online retailers Ocado, Boohoo, The Hut Group (THG) and Asos all benefited from huge increases in their wealth as spending for locked-down consumers migrated online.

The richest person on the list is Sir Len Blavatnik, a Ukrainian-born businessman who made his money from energy and aluminium groups in the former Soviet Union. He previously topped the list in 2015.

However, the increase in Blavatnik’s £23bn during 2020 was mainly down to his investment in the Warner Music record label, which floated on New York’s Nasdaq stock market in June. Blavatnik, who is a US-UK dual citizen after renouncing his Russian passport, increased his wealth by £7.2bn during 2020, the Sunday Times found.

Here’s the full story:

The blustery weather buffeting the UK overnight has blown Britain to a new wind power record, according to the National Grid.

Between 2am and 3am, Britain’s wind farms provided a record 62.5% of the country’s electricity demand, according to provisional data from National Grid’s ESO (Electricity System Operator).

That beats the previous best of 59.9% in August last year.

Good news for the UK’s carbon emissions. But I’m afraid the weather outlook isn’t great. May could be the wettest on record, with further heavy rain forecast just as lockdown rules let more people meet up.

The Bank of England is asking for views on how to make its corporate QE programme more environmentally friendly.

It has launched a consultation, looking at options for “greening” the Corporate Bond Purchase Scheme, which buys £20bn of debt issued by UK companies. It’s part of the much wider £895bn QE programme, which mainly buys UK gilts.

The BOE wants to hear how it can use its balance sheet to incentivise bond issuers to support transition, and encourage other investors to do the same.

You can have your say here

One option would be for the Bank to sell bonds held by polluters.

Then it could buy debt issued by greener companies, pushing down their borrowing costs and rewarding their efforts to lower emissions.

Andrew Hauser, the BoE’s executive director for Markets, argued this morning that the situation is more complicated, though.

In a speech at Bloomberg, he said:

At first sight it might seem the answer is simple: just sell all our high-emission bonds, and use the proceeds to buy low-emission ones. The carbon footprint of the CBPS would fall sharply. And, to the extent the Bank’s actions were influential, the financing costs of high-emissions firms should rise, sending a powerful wakeup call. But indiscriminate ‘portfolio decarbonisation’ of this kind cannot be the best strategy for investors like the Bank seeking to incentivise economy-wide transition to net zero, for two key reasons:

First, the high-emissions firms whose bonds we would be selling are the ones we most need to be at the vanguard of emissions reduction. But selling their bonds doesn’t destroy them as assets, it simply transfers them to other investors. And if investors seeking to incentivise transition are all decarbonising, those left holding the bonds are by definition going to be those with a weaker commitment to net zero;  Second, simply selling anything with a high carbon footprint penalises those with strong and credible emissions reductions plans just as much as it does those with no such plans.

But excluding high-emission bonds from the CBPS should be an option, Hauser added:

Divestment is a powerful tool, and should remain squarely in the toolkit. But it should be used as a credible threat to reinforce incentives, not an indiscriminate ‘quick fix.

Frank van Lerven of New Economics Foundation, who has conducted research into this issue, has welcomed the Bank’s move:

Today’s UK PMIs are the sign that Britain’s economy is already in a better place than after the first wave last summer, says ING economist James Smith.

Smith points out that hiring is clearly picking up quickly, global demand is making up for Brexit disruption, and rising cost pressures may be temporary (as the BoE suggests).

He explains:

Overall, the UK’s growth prospects look good this year. Unless concerns surrounding the India-originating Covid variant start to reverse the recent rise in consumer/business confidence, we expect just-shy of 7% growth this year, including 5% growth in the second quarter.

It’s worth noting that this latter figure is mainly a function of the April/May reopenings, and we don’t think a delay to the final lifting of restrictions in June necessarily needs to make a significant impact on near-term GDP.

Rising demand from consumers, high commodity costs and creaking supply chains are likely to add up to higher inflation, warns Jai Malhi, global market strategist at J.P. Morgan Asset Management:

“Today’s UK PMI release showed that last month’s strong reading was not a one-off. With the economic reopening still underway the rise in the manufacturing PMI showed there is still more growth to come.

Appetite from consumers to spend is clearly booming, but at the same time UK businesses have faced even more acute supply bottlenecks this month – causing input prices to reach their highest level on record. This kind of mismatch between demand and supply usually leads to higher prices for the end customer.

“The services industry may well face the same fate too, with a clear surge in demand for in-person rather than virtual services. The success of the vaccine rollout appears to be giving people more confidence that it is now safer to enjoy the more service oriented parts of the economy but ongoing social distancing is restricting capacity in areas such as restaurants and leisure, creating price pressures there too.

“Overall this release will do little to ease recent market fears that inflation will be an unwelcome guest at the party.”

On Wednesday, we saw that UK inflation more than doubled in April to 1.5%, driven by rising energy costs.

The Bank of England has predicted that any overshoot over its 2% inflation target will be temporary, but governor Andrew Bailey also told a House of Lords committee that the BoE is watching “extremely carefully” for signs of a persistent increase.

UK firms are also taking on more staff to handle this surge in activity

Private sector employment is rising this month at the quickest pace since June 2014, as this chart from the PMI report shows:

Understandably, hotels, restaurants and other consumer-facing services reported the biggest upturn in demand this month.

But, improvements were reported across the board in all sectors, leading to the fastest growth since the Composite PMI began in 1998.

Chris Williamson, chief business economist at IHS Markit, says the UK is enjoying an “unprecedented growth spurt” as the economy reopens.

Factory orders are surging at a record pace as global demand for goods continues to revive, and the service sector is reporting near-record growth as the opening up of the economy allows more businesses to trade. Business confidence has meanwhile hit an all-time high as concerns about the impact of the pandemic continue to fade.

It indicates a surge in growth this quarter, Williamson adds:

“The output and order book growth seen in May, and record level of business optimism, are consistent with GDP rising sharply in the second quarter and for strong momentum to be sustained through the rest of the year, albeit with the current quarter likely representing a peak in the growth rate.

UK companies also reported that their costs jumped at the fastest rate since August 2008, Markit adds.

Manufacturers blamed shortages of raw materials and high shipping costs -- which have been a global problem amid the surge in commodity prices.

Service providers often pointed to increased staff salaries, suggesting a tightening jobs market as hospitality firms and non-essential shops reopened, and more workers are unfurloughed.

Duncan Brock, group director at CIPS, explains:

“Manufacturers keen to secure raw materials for the coming months were forward buying with greater intensity and contributing to the ongoing poor performance of supply chains as delivery times increased to record-levels.

This in turn compounded the number of shortages and impacted on the costs of goods and raw materials. Manufacturing sector inflation rose to the highest since this index began in January 1992 as 76% of supply chain managers paid more for their goods.

As the services sector opened up further, the rush to secure staff gave rise to the fastest increase in jobs since May 2015 and businesses competed to build capacity in their operations by paying higher wages.

UK private sector is growing at its fastest pace in at least two decades this month, as the reopening of the economy drove business confidence to a record.

But UK companies are also hiking their prices at a record speed, in response to the surge in commodity costs and other rising prices such as increased salaries

Data firm IHS Markit reports that business activity across the UK private sector grew strongly in May, at the fastest pace since its survey began in January 1998.

Service sector activity surged, following the easing of restrictions on shops and hospitality firms, while manufacturers continued to benefit from strong demand as the global economy recovers.

This is another sign that the UK economy is rebounding strongly from its contraction in January-March.

Markit says:

Looser pandemic restrictions and high levels of pent up demand meant that a swift turnaround in labour market conditions continued in May, with private sector employment rising at the quickest pace since June 2014.

However, cost pressures were the strongest for nearly thirteen years. Subsequent efforts to protect margins resulted in the sharpest increase in average prices charged by UK private sector firms since this index began in November 1999.

This lifted Markit’s flash UK Composite Output Index to 62.0 in May, from 60.7 in April, which shows the fastest expansion since the index was first compiled more than two decades ago.

Survey respondents widely commented on a post-lockdown bounce in business and consumer confidence, alongside higher output levels due to the phased reopening of customer-facing areas of the UK economy.

The survey found that both services and factories grew strongly (any reading over 50 shows growth):

• Flash UK Services Business Activity Index May: 61.8, 91-month high (up from April’s 61.0)
• Flash UK Manufacturing Output Index May: 63.2, 93-month high (up from April’s 59.2)
• Flash UK Manufacturing PMI May: 66.1, record high since Jan 1992 (up from April’s 60.9)

More to follow...

Business growth across the eurozone has surged this month, with new orders rising at the fastest pace in almost 15 years.

With vaccinations speeding up, and economies unlocking, service sector firms have reported the fastest jump in activity in almost three years in May.

Manufacturing continued to grow strongly, although slightly slower than in April.

Private sector growth hit its highest level in over three years, data firm IHS Markit reports, driven by a surge in new orders - the strongest since 2006.

But companies also suffered rising price pressures -- with manufacturers reporting the largest rise in factory input costs since the survey began 24 years ago.

Markit says:

Eurozone business activity grew at a sharply faster rate in May as economies continued to open up from virus restrictions. The rate of expansion hit the highest for over three years as new order inflows surged to an extent not seen for almost 15 years.

Business optimism about the year ahead continued to break new highs, but price gauges rose further – hitting all-time highs in manufacturing – as demand continued to outstrip supply for many goods and services.

This lifted the flash Composite Purchasing Managers’ Index, which measures activity across eurozone businesses, to 56.9 from April’s final reading of 53.8. That’s the highest since February 2018, and shows faster growth.

• Flash Eurozone Services PMI Activity Index at 55.1 (50.5 in April). 35-month high.
• Flash Eurozone Manufacturing PMI Output Index at 61.9 (63.2 in April). 3-month low.
• Flash Eurozone Manufacturing PMI at 62.8 (62.9 in April). 2-month low.

However, the report also shows that manufacturers are struggling to keep up with demand, as supply chains struggle. Uncompleted backorders hit a record high, for a third straight month.

Markit says:

Inventories of finished goods stock fell at a rate not seen since 2009 as firms increasingly met demand from existing stock

The inability of factories to produce sufficient output to meet orders was in part due to a new record lengthening of input delivery times as supply chains continued to deteriorate.

Private sector growth in France hit its fastest since July 2020, while in Germany it was the second-strongest performance since February 2018.

Other eurozone members grew faster:

However, it was in the rest of the region where the strongest increase in business activity was recorded in May, with growth outside of France and Germany hitting the fastest since the start of 2018 thanks to a record jump in manufacturing output and the largest increase in service sector activity since February 2018

Takeover news: rubbish collector Biffa is gobbling up one of its UK rivals as it tries to tighten its grip on the waste management sector.

Biffa is paying £126m to buy the UK rubbish collections arm and some recycling assets from Viridor Waste Management.

High Wycombe-based Biffa says the deal will reinforce its top position in the UK business waste collections business, with another 15 depots and 21,000 customers around the UK.

The deal will also help Industrial and Commercial [I&C] customers to recycle more products such as plastics, Biffa says, as part of the ‘circular economy’ (reusing and recycling items rather than chucking them in landfill).

Biffa CEO Michael Topham explains:

The addition of Viridor’s £85m collections revenues builds on the Group’s strong track record as the leading market consolidator in the highly fragmented I&C collections market. In addition, the acquired recycling and treatment assets broadens our coverage and control of materials, strengthening Biffa’s position as one of the largest recyclers of post-consumer materials in UK.

“When combined with the other investments we have made over the past year across waste reduction, recycling and energy recovery, we have positioned the Group as a leading enabler of the UK circular economy, ready to tackle the UK’s waste challenge. ”

The company says the deal will be ‘earnings enhancing on completion.”

The City likes the deal, with Biffa’s shares jumping over 5% to the top of the FTSE 250 risers this morning.

Here’s more reaction to the retail sales surge; first economist Julian Jessop, who sees a strong economic recovery:

Howard Archer of EY Item Club say it ‘bodes well’ for economic growth this quarter.

Derek Halpenny of MUFG Bank says ‘surging growth is underway’, driven by much stronger than expected consumer spending.

Earlier, the UK GfK Consumer Confidence Index jumped to -9.00 in May, which is significant in it was the level prevailing in March last year before confidence collapsed on the arrival of COVID.

Reinforcing this good news is the Retail Sales data just released – the overall surge in retail sales of 9.2% m/m in April is over double market expectations underlining once again the difficulty in forecasting economic data through this unprecedented time

Still, it is meaningful given the Bank of England holds a somewhat cautious view on the amount of savings built up that UK consumers ultimately spend and the early indications are that the BoE could be making a too cautious assumption.

Britain’s “rocketing retail sales” are firing up the recovery, explains Paul Dales of Capital Economics:

The surge in retail sales volumes in April shows that households “flooded back to the shops” once they reopened in the middle of the month, he says, and could mean the recovery will be faster than thought.

Dales told clients:

The 9.2% m/m leap in retail sales volumes in April was twice as big as the consensus forecast of 4.5% m/m and a bit stronger than our own forecast of 7.5% m/m. It was clearly driven by the reopening of non-essential shops after they had been closed since the third lockdown began in early January.

The astonishing 69.4% m/m surge in clothing and footwear sales showed that households were particularly keen to update their wardrobes!

After languishing 40-50% below the pre-pandemic peak during the last lockdown, in one big “cha-ching” clothing sales are now just 0.3% below that peak.

He also predict that spending will now shift to hospitality:

• With total retail sales now 10.6% above their pre-pandemic peak, there is less scope for further big gains. But the recovery in GfK consumer confidence to pre-pandemic levels in May (to -9 from -15 in April) and the further rise in spending on electronic cards in May suggests that the economic recovery will continue.
  
  It’s just it will be driven by a surge in spending in the pubs, restaurants and cinemas rather than the shops.

Helen Dickinson, chief executive of the British Retail Consortium, says April’s easing of coronavirus restrictions gave a “welcome boost for thousands of retailers in England and Wales”.

Pent-up demand built up during lockdown continues to be released as the reopening of ‘non-essential’ retail offered the public a welcomed opportunity to visit many of their favourite shops. Improved weather during April meant greater sales of fashion, particularly in outerwear and knitwear, as the public renewed their wardrobe and made plans to meet friends and family outdoors.

Online sales also continued to perform strongly, rewarding those retailers who had invested in their online and delivery operations during the pandemic.

But, Dickinson also warns that “demand remains fragile”, with retailers suffering badly from the pandemic:

Footfall is still down by 40% on the pre-pandemic period, and there are still 530,000 people who work in retail still on furlough. The end of the full business rates relief in England poses a significant threat to retailers who have spent well over a billion pounds on Covid-secure measures aimed at protecting staff and customers.

The Government must deliver on its promise to reform the broken business rates system in their ongoing review. By doing so, the industry will be able to make essential investment in improving their digital offering and breathing new life into our high streets and town centres.”

Britain’s clothing stores needed the reopening sale boost.

As this chart shows, they’ve been hit harder than other non-food retailers (such as department stores and household goods vendors) by lockdown restrictions, and weaker demand for new clothes.

Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, says:

‘’Retailers were in dire need of a spring sales boost after a long dark winter of lockdowns and the grand reopening delivered just that.

Shoppers indulged in a major dose of retail therapy, after being banned from browsing the racks for months. The prospect of being able to go out-out once more and frequent bars and restaurants, saw consumers splashing the cash on the latest fashions. Sales volumes soared in April by 70% in clothing stores, with many queuing around the block to get into their favourite retailers.

As shoppers had the novelty of spending in physical rather than virtual stores, total retail sales for the amount spent and quality bought was up 10% compared to pre-pandemic February 2020 levels, showing clear pent up demand.

Fewer virtual baskets were filled up, with online spending dropping 5.6% in April. The proportion spent online fell to 30% from 34% in March as real shopping trips took over from the trend of browsing in digital stores from the comfort of the sofa.

Sales at British food stores, such as supermarkets, dipped in April -- as some people took the chance to eat (outdoors) at restaurants and bars again.

Clothing sales at food stores also fell, as shoppers returned to specialist clothing outlets as they reopened their doors.

The ONS says:

Feedback from retailers suggested that sales were negatively affected in April by both the re-opening of all retail sectors and the relaxation of hospitality restrictions.

However, spending at food stores is still over 8% higher than before the pandemic:

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The reopening of non-essential stores last month has led to a surge in retail spending, as UK consumers grow more confident about the recovery from the pandemic.

Retail sales across Great Britain surged by 9.2% in April, faster than expected, official data showed on Friday.

It highlights that the reopening of stores in England and Wales on 12 April, and in Scotland from 26 April, uncorked a rush of spending.

Sales volumes were over 42% higher than a year earlier (or nearly 38% if you strip out fuel sales), but that’s a less useful measure as the UK was in a strict lockdown in April 2020.

But retail sales volumes were around 10% higher than their pre-pandemic levels (in February 2020).

The ONS reports that, understandably, non-food stores drove the surge in shopping.

Clothing store sales were up more than 69%, as people seize the opportunity to get back into chains such as Primark (which saw queues of keen shoppers on reopening day).

Spending on petrol also jumped last month, up more than 10%, with the easing of lockdown encouraging people to hit the road again - although it’s still lower than a year ago.

Spending at food stores dipped compared to March, as people had the chance to eat out in pubs and restaurants again.

The ONS explains:

The value and volume of sales were both up 9.2% when compared with March 2021 reflecting the impact of the re-opening of all non-essential retail stores in April.

This signalled continued recovery in the retail sector following the growth in March (5.1%) and February (1.8%). The strongest monthly growth in April 2021 came from clothing stores, other non-food stores and automotive fuel retailers of 69.4%, 25.3% and 10.6% respectively.

And with the high street reopened, online shopping’s share of the market dipped:

• All retail sectors reported a fall in their proportions of online sales as physical stores re-opened during the month; as a consequence, the total proportion of sales online decreased to 30.0% in April 2021, down from 34.7% in March 2021.

British consumers are their most upbeat since the start of the coronavirus pandemic, another report this morning shows, as the lifting of lockdown restrictions and the Covid-19 vaccination rollouts boosts optimism about the economy.

The GfK Consumer Confidence Index improved to -9 in May from -15 in April, the highest since March 2020 -- just before the first lockdown.

Joe Staton, client strategy director at GfK, said.

“The financial mood of the nation has bounced back to its pre-lockdown figure of minus 9 this month, meaning confidence has made up all the ground lost to COVID-19”.

GFK’s gauge of optimism about the economic outlook over the next 12 months jumped by 15 percentage points. It also found that more consumers are willing to make a major purchase, spending some of the savings accrued (by some households) in the lockdown.

Also coming up

Flash PMI surveys will show how service sector companies and factories in the UK, the eurozone, and the US are faring this month as economies reopen.

Over in Japan, though, the private sector has fallen into contraction this month as Covid-19 restrictions hit the service sector. In Australia, the PMI dipped slightly but still showed rapid growth.

European stock markets are expected to open slightly higher, after solid gains on Wall Street last night led by tech stocks. Inflation worries seemed to ebb, with the oil price and US government bond yields both dipping yesterday.

Alvin Tan of Royal Bank of Canada explains:

The growing positive news around the Vienna talks have the market girding for a resumption of Iranian oil exports. Others have pointed to the apparent turn in the Baltic Dry Index this month, suggesting that global logistics bottlenecks may be easing.

All this has also been happening amid the backdrop of Chinese policy tightening.

The agenda

• 9am BST: Eurozone flash service PMIs for May
• 9.30am BST: UK flash PMIs for May
• 2.45pm BST: US flash PMIs for May
• 3pm BST: Euro area consumer confidence report for May
• 3pm BST: US existing home sales data in April