- Retail sales rebound strongly in November; sales growth year-on-year jumps to 1.6pc to give the struggling British high street a shot in the arm ahead of crucial festive period
- Sterling rallies above $1.34 against the dollar after policymakers at the US Federal Reserve struck a cautious tone on inflation despite hiking interest rates for the third time this year
- No change in policy expected at meetings at the Bank of England and ECB later today
- FTSE 100 led lower by sinking banking stocks early on
Retail sales key takeaways
UK retail sales - ticking along. Up 0.8%q/q in the three months to November. pic.twitter.com/eUDZ8IYNBF— Rupert Seggins (@Rupert_Seggins) December 14, 2017
- Retail sales growth rebounded strongly to 1.6pc in November compared to the same period a year earlier with household goods stores performing strongest.
- The ONS initially thought that growth contracted for the first time in four years in October but have revised the figures from -0.3pc to 0pc this morning.
- It said that retailers' feedback indicates that Black Friday events underpinned the climb in sales in household goods stores.
Rhian Murphy, ONS senior statistician, commented:
" Underlying retail sales growth remained reasonably strong in the last few months.
"Household goods stores had a good November, with a number of businesses saying that Black Friday promotions boosted sales."
British high street given shot in the arm ahead of crucial Christmas period
The struggling British high street have been given a shot in the arm ahead of the crucial Christmas period after retail sales rebounded strongly in November, ONS figures indicated.
Buoyed by Black Friday and a robust performance by household goods stores, retail sales growth jumped to 1.6pc in November compared to the same period a year earlier. More to follow...
Retail sales growth expected to make modest rebound from woeful October
5.UK retail sales growth is somehow unique in being squeezed. Nope. It’s been comparable to its international peers since June 2016. pic.twitter.com/jTPB9yoUr0— Rupert Seggins (@Rupert_Seggins) December 14, 2017
Retail sales growth contracted for the first time in over four years in October but economists are expecting a modest rebound to 0.3pc growth in November ahead of the crucial Christmas period.
Growth should have been helped by deals in the run-up to Black Friday at the end of last month luring in shoppers, according to CMC Markets analyst David Madden.
The squeeze on consumer spending caused by wage growth lagging far behind inflation has hit the high street hard this year but pay growth picking up yesterday to 2.5pc is a light at the end of the tunnel for the retail sector.
Mike Ashley insists Sports Direct trading 'spectacularly' despite profits drop
Sports Direct boss Mike Ashley has insisted trading at its flagship stores was “spectacular” after the company reported a sharp fall in profits this morning.
Pre-tax profit at the sportswear retailer fell 67pc to around £46m in the 26 weeks to Oct 29, largely due to one-off costs including currency movements and adjustments to its balance sheet, and profits from disposals in the previous year.
Excluding those, profits grew 23pc to £88m. Mr Ashley said: “Our underlying profit before tax remains healthy.”
Revenues climbed 4.7pc to around £1.7bn, buoyed by its first foray into the US market with the acquisition of Bob's Stores and Eastern Mountain Sports in a $101m (£75m) deal earlier this year.
Agenda: Pound rallies against the dollar as Fed strikes cautious tone on inflation despite hiking interest rates
The pound is rallying against the dollar after policymakers at the US Federal Reserve struck a cautious tone on inflation despite hiking interest rates for the third time this year.
The Fed voted 7-2 in favour of increasing rates to 1.5pc but the dollar slipped on currency markets on concerns that sluggish inflation could slow the pace of monetary policy tightening at the central bank.
Two dissenters voicing their concerns on inflation and dovish rate hike projections has boosted sterling 0.6pc against the greenback to $1.3433.
Asia stock markets drop after a surprise hike in short-term interest rates by China’s central bank. PBoC followed the Fed w/ a limited boost to market rates. Fed hiked as expected, but did not increase their rate hike projections over next few years, relatively dovish outcome. pic.twitter.com/u1jpM00xLJ— Holger Zschaepitz (@Schuldensuehner) December 14, 2017
The Bank of England and European Central Bank also have policy meetings later today but neither is expected to make any changes given recent policy announcements. The Bank of England hiked interest rates for the first time in a decade last month while the ECB recently revealed that it will begin tapering its €60bn-a-month quantitative easing programme from January.
With little action expected at the central banks, retail sales figures for November will dominate focus for investors in the UK. The high street has endured a woeful of trading but sales are expected to pick-up in November after sinking the previous month.
Interim results: Sports Direct
Trading statement: Bunzl, Ocado, Petrofac, PZ Cussons, 888 Holdings
Economics: Retail sales (UK), Bank of England monetary policy decision (UK), Retail sales (US), Composite PMI (US & EU), ECB monetary policy decision (EU)