Retail sales defy gloomy projection but Bank of England holds interest rates as it lowers growth forecast

The latest hard data from the Office for National Statistics shows that retail sales volumes unexpectedly spiked 1.4 per cent month-on-month in November, causing them to be up 3.6 per cent year-on-year.

The data defied economists’ forecasts of about a 0.3 per cent gain.

But for the three months to November, which smoothes out monthly volatility, sales growth was 0.4 per cent on the previous quarter, the slowest rate since April.

The ONS said the changing nature of Black Friday sales promotions posed a challenge for the process of adjusting for seasonal variations.

Household goods sales leapt by 5.3 per cent on the month in November, the biggest increase since the end of 2013 and driven by an 11 per cent increase in electrical appliances.

Online sales as a proportion of all retailing exceeded 20 per cent for the first time, the ONS said.

Meanwhile, The Bank of England has cut its UK growth forecast for next year as its Monetary Policy Committee (MPC) voted to keep interest rates at 0.75 per cent as it warned a lack of Brexit clarity is hitting the economy.

The Bank said uncertainty over the UK’s departure from the EU had “intensified considerably” over the past month and said the economy was likely to grow by 0.2 per cent in the final quarter of 2018, down from an earlier forecast of 0.3 per cent.

That follows growth of 0.6 per cent in the previous quarter.

The Bank said it expects slower economic growth to continue into 2019.