Commenting on retail sales volumes figures published today by the ONS, Julian Jessop, IEA Economics Fellow, said:
“The recovery in retail sales to pre-pandemic levels in July reflects the flexibility of a free-market economy. While some retailers are clearly struggling in the new environment, others have thrived.
“Online retailers have played a crucial role in providing consumers with more choice and allowing those who need to stay at home to shop safely. Online spending also supports jobs. Indeed, many traditional bricks-and-mortar retailers now have an online presence too. This underlines the folly of imposing additional taxes on online spending.
“Retail sales make up only a small part of the economy and were always likely to recover more quickly than other types of spending where the constraints of social distancing have more impact. But other indicators and surveys – including the latest purchasing managers surveys for August – suggest that overall spending is continuing to recover too.
“A surge in unemployment remains the biggest economic risk. But most people have already come off the government’s furlough scheme and returned to work. The UK’s relatively flexible labour market is also good at creating jobs and should be able to replace those that will inevitably be lost, provided it is allowed to work properly.”