UK retail sales rise more than expected in November

Retail sales in the UK rose more than expected in November, according to the latest figures from the Office for National Statistics.

Sales last month - which included Black Friday promotions - were up 1.4% from October, comfortably beating expectations for a 0.3% increase and compared to a 0.4% drop the month before. The ONS highlighted particularly strong growth of 5.3% in household goods stores, which provided the largest contribution to overall growth within non-food stores.

On the year, retail sales were 3.6% higher compared to a 2.4% rise in October and expectations for a 1.9% jump.

"Retailers reported strong growth on the month due to Black Friday promotions in November, which continues the shifting pattern in consumer spending to sales occurring earlier in the year," the ONS said.

However, in the three months to November, retail sales were just 0.4% higher compared to the previous three-month period, marking the weakest growth since April.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the jump will be revised away in time.

"It’s unsurprising that the official measure of retail sales picked up in November, given the decline in sales in the previous two months and the still-growing tendency of consumers to do more Christmas shopping on Black Friday.

"Most of the pick-up in total sales, however, will be revised away in time, when the seasonal adjustment process updates for the new pattern on spending generated by Black Friday. Note that every initial estimate of month-to-month growth in total sales volumes since 2014 - when Black Friday was widely adopted by retailers - has been revised down, by an average of 0.8pp. In the meantime, the first estimate of sales growth in December will be deeply negative, because the seasonal adjustment process will adjust for a bigger seasonal surge in spending than will materialise.

"In the round, Christmas trading for retailers still looks set to be underwhelming, due to the adverse impact of Brexit uncertainty on consumers’ confidence. For now, we look for a 0.8% month-to-month fall in sales volumes in December, leaving them up just 0.1% quarter-on-quarter in Q4."