UK Retails Sales Rise; Ireland GDP Expands

Arthi Gupta
16 Dec, 2010
New York City

The UK indexes closed lower and retail sales rose in November. Irish GDP expanded 0.5% in the third quarter and factory gate prices remained stable in November. Rolls-Royce secured $89 million contract for U.S. Navy T-45 trainer engine support.

[R]4:00 PM London – The UK indexes closed lower and retail sales rose in November. Irish GDP expanded 0.5% in the third quarter and factory gate prices remained stable in November. Rolls-Royce secured $89 million contract for U.S. Navy T-45 trainer engine support.[/R]

The Bank of England policymakers should not ""overreact"" reflexively to above target inflation, Adam S Posen, an external member of the bank''s monetary policy committee, said in a speech at Billericay today.

UK inflation was at 3.3% in November; above the central bank''s 2% target for a twelfth consecutive month and is expected to remain high for the next few months after the scheduled increase in value-added tax according to Posen.

In London, FTSE 100 Index declined 14.45 or 0.24% to 5,867.63 and the pound edged higher to close at $1.5605.

UK Retail Sales Up

The UK retail sales volume including automotive fuel increased 0.3% on a monthly basis in November following an upwardly revised 0.7% gain in October, the Office for National Statistics said on Thursday. Sales grew for a second straight month.

On an annual basis, retail sales rose 1.1% in November, compared to the 0.3% rise in October.

In another report, the Bank of England-Gfk NOP Inflation Attitudes Survey, covering over 2,000 people, said consumer inflationary expectations surged to 3.9% in November from 3.6% in August.

The survey also revealed 52% of respondents expected interest rates to rise over the next 12 months, compared with 48% in August.

Irish GDP Expands, Current Account Balance Exceeds

Ireland''s seasonally adjusted gross domestic product increased 0.5% on a sequential basis in the third quarter, compared to a 1.5% fall in the previous quarter, a preliminary estimate by the Central Statistics Office showed. A year earlier, the GDP decreased 0.5%.

Annually, the GDP dropped 0.5% in the third quarter, following a 1.8% fall in the second quarter.

Ireland''s current account balance surplus was €255 million in the third quarter compared to €1.14 billion deficit in the second quarter, largely due to rise in merchandise trade surplus, the Central Statistics Office said on Thursday.

Ireland''s factory gate prices remained unchanged on an annual basis in November, after falling 0.7% in October, the Central Statistics Office said on Thursday. A year earlier, prices fell 2.8%.

On a monthly basis, factory gate prices rose 1.6% in November, compared to a 2.5% fall in October. The price index for export sales increased 1.6% in November, while the index for home sales grew 1.2%.

Rolls-Royce Wins Contract

Rolls-Royce Group plc said it won an $89 million MissionCare contract by the U.S. Department of Defense Naval Air Systems Command to provide support for the F405 engines that power the U.S. Navy''s T-45 training aircraft.

Under the deal terms, Rolls-Royce will provide all maintenance, support, trouble-shooting, parts supply and logistics for both the F405 engine and the aircraft gas turbine starting system.

Gainers & Losers

Begbies Traynor Group fell 2.75% to 62.00 pence after the corporate restructuring specialist said first-half revenues rose 0.4% to £34.37 million from £34.24 million last year. Profit for the period dropped 30% to £1.64 million or 1.8 pence per share, from £2.33 million or 2.6 pence per share last year.

cScape Group Plc surged 17.14% to 8.20 pence after the company engaged in providing Internet-based, business-to-business services, and publishing services reported fiscal year 2010 revenues fell 8% to £4.73 million from £5.14 million in the previous year. Profit for the fiscal year 2010 was £13,000 or 0.12 pence per share, compared to loss of £319,000 or 2.85 pence per share last year.

Fletcher King plc soared 27.12% to 37.50 pence after the property fund management services provider stated first-half revenue improved 13% to £1.49 million from £1.32 million a year earlier. Profit for the period declined 21% to £121,000 or 1.31 pence per share from £153,000 or 1.66 pence per share a year earlier.

Laura Ashley Holdings plc gained 11.76% to 19.00 pence after the home furnishing and women''s fashion retailer said in the first 19 weeks of the second-half to December 11, total UK retail sales increased 1.3% annually, while like-for-like sales increased 2.7%.

Sports Direct International Plc rose 5.48% to 154.00 pence after the sporting goods retailer reported first-half revenues grew 8.3% to £819.9 million from £756.9 million in the same period last year. Profit during the period surged 77% to £69.09 million or 11.43 pence per share from £38.93 million or 6.46 pence per share last year.