UK government borrowing hits record high in April and retail sales slump – business live

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

We start with some breaking news — UK government borrowing hit its highest level on record last month amid the Covid-19 pandemic, as retail sales across the country plunged at a record pace.

The Office for National Statistics has just reported that public borrowing in April is estimated to have surged to £62.1bn. That’s £51.1bn more than in April 2019, and the highest borrowing in any month since records began in January 1993.

Indeed, it’s almost as much as the UK borrowed in the whole of the last financial year:

This is an early sign of the massive cost of the government’s attempts to limit the damage of the Covid-19 crisis, including its jobs guarantee scheme.

But the ONS also cautions that “the effects of COVID-19 are not fully captured in this release”.

The ONS has also reported that retail sales across the UK slumped at an unprecedented rate in April.

Sales fell by over 18% compared with March, due to the widespread shutdown of non-essential shop, taking turnover down to its lowest level since 2005.

The ONS explains:

• The volume of retail sales in April 2020 fell by a record 18.1%, following the strong monthly fall of 5.2% in March 2020.
• All sectors saw a monthly decline in volume sales except for a record increase in sales for non-store retailing at 18.0% and a continued increase in sales for alcohol stores at 2.3%.
• The volume of clothing sales in April 2020 plummeted by 50.2% when compared with March 2020, which had already fallen by 34.9% on the previous month.

This comes as fears over the UK hospitality industry grow, with many pubs, bars and restaurants warning they will close some outlets permanently.

Stock markets are also under pressure, after China abandoned its long-held practice of setting a GDP target – presumably because growth has been so badly hit by the pandemic.

More details and reaction to follow!

The agenda

• 7am BST: UK public sector net borrowing for April
• 7am BST: UK retail sales for April