17th December 2015
Black Friday helped retail sales jump 1.7% month-on-month in November, taking the annual rise to 5% according to official numbers.
Figures from the Office for National Statistics suggest the stronger backdrop may help boost fourth quarter GDP growth.
Notably the ONS data contrasted markedly with a survey from the British Retail Consortium, which had suggested retail sales had been lacklustre in November.
Howard Archer, chief UK and European economist at research group IHS Global Insight asserted that November’s surge in retail sales is a major boost to hopes that robust consumer spending will help UK GDP growth rebound in the fourth quarter after slowing to 0.5%, from 0.7%, in the July to end of September period.
He said: “We had pencilled in GDP growth of 0.6% quarter-on-quarter in the fourth quarter but the strength of retail sales in November suggests that there is a chance it could come in higher.
“Retail sales were up 2.1% in the three months to November compared to the three months to July so look set to see very strong growth over the fourth quarter. Much will depend though on how much consumers brought forward their purchases to November from December to take advantage of the Black Friday and other discounts.”
Archer highlighted that even if retail sales volumes were only flat in December, they would increase 1.8% quarter-on-quarter in the final three months of the year.
He added: “While consumer confidence has come off the peak levels seen around midyear and earnings growth has slowed recently, the fundamentals still look largely healthy for consumers. Purchasing power is still relatively decent, employment is high and rising and the recent renewed fall in petrol prices frees up more money for discretionary spending.
“Specifically, annual average earnings growth of 2.4% in the three months to October was still 2.3 percentage points above consumer price inflation of 0.1% in November.”
The ONS also confirmed this week that employment was up 207,000 in the three months to October to be at a record high of 31.302m.