Retail rally pushes UK markets to new peaks

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The Independent Online

The prospect of a millennium-inspired consumer boom helped drive the stock market to new peaks yesterday.

The prospect of a millennium-inspired consumer boom helped drive the stock market to new peaks yesterday.

The FTSE 100 index closed 29.4 up at a record high of 6,835.9, with major retailers recording strong gains and telecoms and IT stocks such as BT and Sage continuing to soar. In the FTSE 250, Debenhams shares shot up 17 per cent to 199p and Signet, the H Samuel and Ernest Jones jewellery retailer, rose on reports of a good start to the winter sales.

Anecdotal evidence from shopping centres and retailers yesterday suggested another day of buoyant trading, though the late sales surge is unlikely to cancel out the effects of one of the toughest years on the high street in living memory.

Bluewater, the giant new shopping centre near Dartford, Kent, said the mall was packed to bursting again yesterday. "It's been a superb start to the sales," a Bluewater spokeswoman said. "All the fashion stores are heaving and the home-furnishing outlets are also doing well."

John Lewis, the department store group, said its winter "clearance" had started strongly. Millennium-related goods such as hallmarked silver, jewellery and clothes "for people wanting to party" have all been selling well, the company said.

Marks & Spencer said its main Marble Arch store in central London had been very busy with lingerie, men's suits and women's knitwear enjoying brisk trade. However, M&S's mid-January trading statement is expected to show double-digit declines in like-for-like sales after the worst year in its history.

Goldsmiths, the jewellery retailer, was the first high-street retailer to issue a Christmas trading statement yesterday, with an optimistic sales message. The company, which was taken private earlier this year, said sales in the four weeks to Christmas Eve were up 26 per cent on last year if new stores are excluded.

It is not only the high street which is seeing a surge in consumer spending. There were fresh signs of strength in the housing market with the Nationwide house-price index jumping 1 per cent in December, leaving the annual rate of increase unchanged at 13.3 per cent. The average house has increased by nearly 4 per cent in value, to £75,219, in the past three months.

Separately yesterday, the British Bankers' Association reported a net increase of £1.6bn in mortgage lending in November, although the number and value of loans approved during the month - a guide to future lending - fell slightly.

The BBA said credit-card borrowing in November was weaker than expected for the time of year. "It seems that cards are being used simply as a delayed payment method, while spending is being financed by personal loans and overdrafts," the BBA said.

The figures coincided with news that consumer confidence bounced back last month following a dip in November in the wake of the latest interest rate rise, according to the monthly GfK survey carried out for the European Commission. "The speed with which sentiment has recovered suggests the current high level of consumer confidence has solid foundations," GfK said.