INSTANT VIEW-Retail sales rise more than expected

LONDON (Reuters) - Retail sales rose more than expected in November as online sales surged, the Office for National Statistics said on Friday.

The figures suggest that consumer demand is still holding up in the face of a housing market slowdown and the global credit crunch and stores complaining about poor demand may just be losing out to internet retailers.

ANALYST COMMENTS

VICKY REDWOOD, CAPITAL ECONOMICS

"November's 0.4% rise in retail sales volumes was hardly spectacular, but pretty good nonetheless, given that consumers don't have a lot to feel cheery about at the moment. October's small drop was also revised away.

"Even a decent rise in sales in December will not stop sales in Q4 overall rising by less than in Q3. So it still looks like GDP growth has slowed in Q4. What's more, consumers can only put off the inevitable for so long. High interest rates, a slowing housing market and rising energy prices all look likely to put a bigger dent in sales growth next year."

JAMES KNIGHTLEY, ING

"With house and equity prices falling and BRC and CBI retail surveys suggesting weakness ahead we suggest that retail sales growth will slow further. We continue to favour February for the timing of the next rate cut given the BoE's inflation worries, but believe rates will be cut to 4.75% by end Q3 2008."

ALAN CLARKE, BNP PARIBAS