The UK retail index rose to a +9 in December after posting a -19 in November. Sales have been expected to slip as sales for this ‘time of year’ were projected at a -36. Orders also ‘improved’ to a -4 from a -25 result back in November. That is orders were slipping but not as badly as they had been slipping. Such is the lexicon of the ‘Net’ readings in this survey. Still, stocks are higher at +10 up from +8 in November. Despite the reading that sales are better inventories are still moving higher.

Looking ahead the outlook for January has sales at -18 compared to a year ago implying that retail respondents are treating the monthly +9 as a one-off result. Orders over one year ago are projected at a -8 which is much better than what had been mooted for December. Sales for the ‘time of year’ are still put at a -27 which is better than the -36 which had been set out for December but still worse than the -19 that had been projected for November.

On balance there is some unexpected good news but it does not seem to have affected the outlook or perceptions of current economic strength by very much.

The percentile readings for the current barometers are weak but the standings for the expected variables looking into January are generally as bad - or lower than their values in December. For now, we evaluate this unexpected good news as an anomaly and wait for a reassessment next month. Of course, all the dallying in Europe and the sniping back and forth between EMU members and the UK make it prudent to see risk as still lingering and to be skeptical about good news when it shows its face.