UK retail sales disappoint before Christmas

LONDON - UK retail sales rose less than expected in the runup to Christmas, according to official data Friday that deals a fresh blow to government hopes of growing the economy.

Separate figures revealed a temporary reprieve for Prime Minister Keir Starmer, however, as public borrowing fell sharply in November.

The updates follow news this week of higher inflation in Britain -- an outcome that caused the Bank of England on Thursday to leave interest rates unchanged.

Retail sales by volume grew 0.2 percent in November after a drop of 0.7 percent in October, the Office for National Statistics said Friday.

That was less than analysts' consensus for a 0.5-percent gain.

"It is critical delayed spending materialises this Christmas to mitigate the poor start to retail's all-important festive season," noted Nicholas Found, senior consultant at Retail Economics

"However, cautiousness lingers, slowing momentum in the economy. Households continue to adjust to higher prices (and) elevated interest rates."

He added that consumers were focused on buying "carefully timed promotions and essentials, while deferring bigger purchases".

The ONS reported that supermarkets benefited from higher food sales.

"Clothing stores sales dipped sharply once again, as retailers reported tough trading conditions," said Hannah Finselbach, senior statistician at the ONS.

The Labour government's net borrowing meanwhile dropped to £11.2 billion ($14 billion) last month, the lowest November figure in three years on higher tax receipts and lower debt-interest, the ONS added.

The figure had been £18.2 billion in October.

"Borrowing remains subject to upside risks... due to sticky interest rates, driven by markets repricing for fewer cuts in 2025," forecast Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics.