London pre-open: Stocks seen up as investors mull consumer confidence, retail sales

London stocks were set to rise at the open on Friday as investors mulled an improvement in consumer confidence but a bigger-than-expected drop in retail sales.

The FTSE 100 was called to open around 35 points higher.

Figures released earlier by the Office for National Statistics showed that retail sales fell by 0.7% on the month in October amid uncertainty ahead of the Budget, and following a 0.1% increase the month before. Economists had been expecting a 0.3% decline.

ONS senior statistician Hannah Finselbach said: "Retail sales fell back in October following three months of growth. The fall was driven by a notably poor month for clothing stores, but retailers across the board reported consumers held back on spending ahead of the Budget.

"However, when we look at the wider trend, retail sales are increasing across the three month and annual periods, although they remain below pre-pandemic levels."

Also on Friday, a long-running survey showed that consumer confidence jumped in November, after uncertainty seen in the run-up to the Budget eased.

The latest GfK consumer confidence index was -18 in November, a three-point jump on October, when it eased one point to -21.

It was also a notable improvement on the -24 recorded in November 2023.

Within the overall index score, all but one sub-measure strengthened. Expectations for personal finances over the coming 12 months rose one point to -1, while the economic outlook also improved, by two points to -26.

Consumers were also more willing to spend in the run up to Black Friday, with the major purchase index jumping five points to -16. In contrast, the savings index fell 3 points to 24.

Neil Bellamy, consumer insights director at GfK, said: "There was evidence of nervousness in recent months as consumers contemplated the potential worrying impact of the Budget at home, and even the implications of the US presidential election.

"But we have moved past these events now. The biggest change this month is in major purchase intentions, an important measure.

"However, while 2025 is just around the corner and the new year often brings optimism, it’s too early to expect significant further improvements in the consumer mood."

Bellamy pointed to inflation, which ticked higher in October to 2.3%, and ongoing cost of living pressures as potential headwinds.

In corporate news, Warhammer maker Games Workshop lifted half-year guidance after trading in the last two months exceeded expectations.

The company forecast pre-tax profit of at least £120m for the six months to December 31, compared with £96.1m a year earlier. Core revenue was estimated at not less than £260m and licensing revenue of at least £30m.

Workspace Group reported a half year of growth, with net rental income rising 4.3% to £60.2m, alongside an increase in trading profit and a 4.4% hike to the dividend despite a marginal decline in like-for-like occupancy and portfolio valuation.

Trading profit came in at £32.7m for the six months ended 30 September, while the board raised the interim dividend to 9.4p per share.