December retail growth higher than expected

Retail sales volumes grew in the first two weeks of December, marking the first increase in seven months, according to the Confederation of British Industry's latest monthly Distributive Trades Survey.

The CBI reported 41 percent of U.K. retailers showed year-over-year sales growth in December, and only 39 percent reported a decrease in sales. This is the first year-on-year sales growth in the U.K. retail industry since May 2011.

"Early discounting helped retailers add a little extra sparkle to their sales in December," said Judith McKenna, chair of the CBI Distributive Trades Panel.

The report showed grocers experienced a 52 percent increase in sales compared to a year ago, while non-store retailers, including online stores and mail order companies, reported a 91 percent increase year-over-year for sales.

In an interview with the Telegraph, Annalisa Piazza of Newedge Strategy said the uptick in sales right before Christmas can likely be attributed to generous retail discounts and competitive supermarket food prices. Consumer confidence has increased as well across the U.K., up to 40 in November from 36 in October, according to the Nationwide Building Society.