Fears that this Christmas could be a washout for retailers subsided yesterday after official figures showed the festive shopping season had started earlier than many had expected thanks to a boom in internet sales.
A strong contribution from orders placed online helped the volume of retail sales in November to rise by 0.3 per cent on the previous month, the Office for National Statistics (ONS) said, which was better than forecast. The IMRG, the internet industry body, said UK sales placed online hit £3bn in a single month for the first time in November. Non-store sales, which includes specialist internet retailers and mail order businesses, jumped nearly 3 per cent on the previous month. In the year to November, retail sales has risen by 3.2 per cent, although the ONS stressed that quarter-on-quarter growth of 0.5 per cent was "modest compared with average growth over the last few years".
Despite reports that retailers have had to slash prices, the data showed that shops had put their prices up in November for the third successive month. Annual retail price inflation rose to 0.3 per cent from 0.1 per cent in October.
A survey by the Bank of England showed that Britons' expectations of future inflation shot to 2.7 per cent in the three months to November, up from 2.5 per cent in August. It last hit this level in February. Asked what the current rate of inflation was, respondents cited a median 2.9 per cent, which is the highest level since the Bank started the survey six years ago. This will stoke concerns that the country is heading for an inflationary pay round in the new year after average earnings growth jumped unexpectedly last month.
Meanwhile the housing market is showing no signs of slowing down, according to the Nationwide Building Society, which predicted that house prices would shoot 7 per cent higher in 2007. Nationwide's group economist, Fionnuala Earley, said the new year could see double-digit increases in house prices.
The Confederation of British Industry raised its forecast for economic growth for the year to 2.7 per cent. It cited strong growth in government investment from 6.7 per cent in 2006 to 13.2 per cent next year.Reuse content