(Sharecast News) - London stocks edged higher in early trade on Friday as investors mulled better-than-expected UK retail sales data.
At 0820 GMT, the FTSE 100 was up 0.3% at 7,558.06.
Figures released earlier by the Office for National Statistics showed that retail sales bounced back in January as shoppers hit the high street again.
Sales rose 1.9% following a 4% slump December, when Omicron took its toll. This was ahead of analyst expectations for a 1% increase and marked the strongest monthly jump since lockdown ended last Spring. It left sales volumes 3.6% above their pre-pandemic levels.
The data showed that non-food stores sales rose 3.4% in January as home improvement sales volumes picked up, with increased sales in household goods and garden centres. Meanwhile, automotive fuel sales were up 4.1% following a 5% decline in December, when home working and lower retail footfall reduced travel.
Darren Morgan, director of economic statistics at the ONS, said: "After a sluggish December where the omicron wave had a significant impact, retail sales rebounded in January with their biggest monthly rise since the shops reopened last spring.
"It was a good month for garden centres, department and household goods stores, with particularly strong trading for furniture and lighting.
"Food sales fell below their pre-pandemic level for the first time, though, as more people returned to eating out and there was also anecdotal evidence suggesting higher demand for takeaways and meal-subscription kits.
"Following a rise in high street footfall towards the end of the month, the proportion of online sales dropped to its lowest level since March 2020, while an increase in road traffic helped push fuel sales up from December."
Adam Hoyes, assistant economist at Capital Economics, said the solid rise in retail sales volumes in January adds to signs that the Omicron-induced hit to activity was smaller and shorter-lived than previously thought. "Even so, the cost of living crisis means the outlook for retailers is anything but bright," he said.
Data released earlier this week by the ONS showed that UK inflation hit 5.5% in January as consumer prices reached their highest level since 1992. This was up from 5.4% in December and compared to forecasts for an unchanged figure.
Earlier this month, the Bank of England said it expected inflation to peak at around 7.25% in April, when a 54% rise in regulated household energy bills will take effect.
In equity markets, real estate investment trust Segro rallied after it hiked its full-year dividend and said 2021 had been "a highly successful year", with adjusted pre-tax profits and net asset value improving amid record levels of rental growth.
TBC Bank gained after it said annual profit more than doubled in 2021, driven by strong income and a recovery in the Georgian economy.
On the downside, NatWest Bank lost ground despite saying it swung to a full-year profit as it released more than £.17bn in cash set aside for loan defaults during the Covid pandemic. It also said it expected to achieve a return on tangible equity "comfortably" above 10% in 2023.
The bank, majority owned by the UK taxpayer, posted a full-year attributable profit of £2.95bn compared with a £753m loss a year earlier. Fourth-quarter earnings came in at £434m against a loss of £109m in 2020, but lower than the £674m profit in the prior three months.
Market Movers
FTSE 100 (UKX) 7,558.06 0.27%
FTSE 250 (MCX) 21,579.21 0.10%
techMARK (TASX) 4,364.50 -0.12%
FTSE 100 - Risers
Pearson (PSON) 633.20p 1.60%
Evraz (EVR) 308.90p 1.18%
Rio Tinto (RIO) 5,644.00p 1.00%
Glencore (GLEN) 424.85p 0.99%
Imperial Brands (IMB) 1,769.00p 0.88%
Diageo (DGE) 3,647.00p 0.86%
Anglo American (AAL) 3,553.00p 0.85%
SSE (SSE) 1,618.50p 0.81%
United Utilities Group (UU.) 1,059.00p 0.81%
National Grid (NG.) 1,087.00p 0.78%
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Scottish Mortgage Inv Trust (SMT) 1,037.00p -2.08%
Ocado Group (OCDO) 1,341.00p -1.43%
Aveva Group (AVV) 2,653.00p -1.38%
NATWEST GROUP PLC ORD 100P (NWG) 237.60p -1.12%
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TBC Bank Group (TBCG) 1,524.00p 2.56%
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Cineworld Group (CINE) 40.05p 1.01%
Mitie Group (MTO) 60.80p 1.00%
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Harbour Energy (HBR) 358.00p 0.96%
easyJet (EZJ) 696.60p 0.96%
Ferrexpo (FXPO) 277.00p 0.95%
FTSE 250 - Fallers
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Darktrace (DARK) 314.40p -1.69%
Petropavlovsk (POG) 15.78p -1.38%
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Auction Technology Group (ATG) 900.00p -1.10%
Trustpilot Group (TRST) 150.50p -1.05%
Petershill Partners (PHLL) 197.60p -1.00%
Helios Towers (HTWS) 149.00p -0.93%
Spirent Communications (SPT) 236.80p -0.92%
Provident Financial (PFG) 311.80p -0.89%