London open: FTSE flat as investors mull retail sales, borrowing figures

(Sharecast News) - London stocks were steady in early trade on Friday as investors mulled the latest retail sales and borrowing figures.

At 0850 GMT, the FTSE 100 was flat at 9,839.81.

Data released earlier by the Office for National Statistics showed that retail sales softened in November, undershooting expectations for a small rise, after Black Friday failed to bolster demand.

Retail sales volumes were estimated to have fallen by 0.1% on a seasonally-adjusted basis, following an upwardly revised fall of 0.9% in October. Analysts had been expecting a 0.4% uplift.

In the three months to November, sales rose 0.6%, boosted by strong performances from both clothing shops and computer and telecommunication retailers. However, the three-month rise was below expectations, for a 0.9% increase.

Seasonally-adjusted figures strip out the effect of Black Friday, which this year was on 28 November; last year it fell into the ONS's December reporting period.

On a non-seasonally adjusted basis, sales volumes jumped 11.9%, compared with a 4.4% rise in October.

The ONS said data suggested that the Black Friday effect was "slightly weaker than usual" this year.

According to its own research into public opinions, less than a third of adults said they planned to shop in the Black Friday sales.

Separate figures from the ONS showed that government borrowing hit a four-year low in November.

Borrowing - which is the difference between total public sector spending and income - came in at �11.7bn, down �1.9bn on November 2024 and the lowest borrowing figure for that month since 2021. Nevertheless, it was above economists' expectations for a decline to �10bn.

Borrowing in the financial year to November was �132.3bn, up �10bn on the same period a year earlier and the second-highest April to November borrowing on record after that of 2020.

ONS senior statistician Tom Davies said: "Despite an increase in spending, this month's borrowing was the lowest November for four years. The main reason for the drop from last year was increased receipts from taxes and National Insurance contributions.

"However, across the financial year to date as a whole, borrowing is higher than last year."

Investors were also digesting the latest survey from GfK, which revealed that consumer confidence improved a little in December but remained subdued.

In equity markets, WH Smith slumped as it said the Financial Conduct Authority has begun an investigation into the group after accounting failures in its US operations and as it reported a drop in full-year profit before tax and non-underlying items to �108m from �114m.

The company also said it was looking to recover overpaid bonuses from former executive directors following the restatement of profits in the 2023 and 2024 financial years.

Richard Hunter, head of markets at Interactive Investor, said: "The lack of a bounce to the update, when perhaps the bad news should already have been factored in, is proof if it were needed that investor confidence is sorely lacking. The decline follows a precipitous drop when the North American issue was announced, with the shares 37% down since the announcement and 42% lighter over the last year, as compared to a gain of 9.4% for the wider FTSE250.

"The slump has also prevented the group from recapturing its pre-pandemic glories, instead of which the share price is 74% lower than the levels of December 2019. With so much investor confidence damage to repair, a market consensus which has reduced from a previous buy to stand at a hold for the time being is of little surprise."