British retail sales surge by 5.3pc
British retailers had the fastest annual sales growth in more than nine years last month, confounding gloomy reports from many bigger chains and offsetting some signs of weakness in other areas of the economy.
Sterling jumped and government bond prices tumbled after the data, which was much stronger than expected. It revived speculation about when the Bank of England might raise interest rates.
Helped by a strong performance by smaller stores, British retail sales surged by 2.6pc in December to show an annual rise in volumes of 5.3pc -- the fastest growth since October 2004 -- Office of National Statistics (ONS) data showed.
This far outstripped economists' forecasts before the data for monthly growth of 0.4pc -- similar to November's rate -- and for sales to be 2.6pc higher on the year.
The upbeat figures increase the chance that there was strong overall economic growth in the past three months of 2013; though weak sales in October and November mean that for the quarter as a whole, sales volumes are up just 0.4pc.
Alan Clarke, an economist with Scotiabank in London, said yesterday's data would not push gross domestic product growth above 1pc in the fourth quarter, but would help offset the hit from weak construction data last week.
The ONS numbers contrasted with figures from the British Retail Consortium, which covered mostly bigger stores and suggested shoppers spent just 1.8pc more in December than a year earlier, slowing from November.