Little festive cheer as British retail sales inch up; borrowing falls in

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

After a disappointing autumn, retail sales across Great Britain have returned to growth – helped by early Black Friday offers.

Retail sales volumes across the country rose by 0.2% month-on-month in November, new data from the Office for National Statistics show – following a 0.7% fall in October when budget uncertainty gripped the economy.

November is a key month in the Golden Quarter for retailers, but these figure aren’t exactly sparkling. While retailers will welcome any pick-up in trading, November’s sales are weaker than expected – economists had forecast a 0.5% rise.

Sales rose at supermarkets and other non-food stores, but there was a drop in takings at clothing retailers.

Neil Birrell, chief investment officer at Premier Miton Investors, says the data suggests consumers are “feeling the pinch in a sluggish economy”.

Birrell adds:

With the Bank of England keeping interest rates on hold [yesterday] and inflation in the system, there are concerns around growth prospects as we go into the new year. Christmas is a key period for retail sales and will give a further clue on short term outlook and may influence the BoE at its next meeting.

Unfortunately, the data doesn’t directly capture what happened on Black Friday, which fell on 29th November – but the ONS has adjusted its data to reflect that.

ONS senior statistician Hannah Finselbach explains:

“Retail sales increased slightly in November following last month’s fall.

“For the first time in three months there was a boost for food store sales, particularly supermarkets. It was also a good month for household goods retailers, most notably furniture shops.

“Clothing store sales dipped sharply once again, as retailers reported tough trading conditions.

“With November’s retail sales survey covering the four weeks to the 23 November, Black Friday itself will fall within December’s figures. However, our figures account for this shift in timing to give us the best picture of what is happening in the shops.”

The agenda

• 7am GMT: UK retail sales report for November

• 7am GMT: UK public finances report fro November.

• 10.30am GMT: Bank of Russia’s interest rate decision

• 1.30pm GMT: US PCE inflation measure for November

• 3pm GMT: Universiy of Michigan survey of US consumer confidence 3pm