Today's solid retail sales numbers (+0.4% in October with upward revisions to prior months) were foreshadowed by a pick-up in "retail M4" – notes and coin in circulation plus bank and building society retail deposits. Annual growth in this measure rose further to 6.1% last month, the highest since June last year – see first chart.

Meanwhile, mortgage approvals for house purchase by large UK banks continued to recover last month – second chart. The current rate of approvals is consistent with industry-wide net mortgage lending rising to about £3 billion per month in early 2010 from an average of only £600 million in the second and third quarters.

By contrast, public borrowing figures for October were disappointing, with the deficit after seasonal adjustment reaching another new record – third chart. Nevertheless, there is still a chance that the full-year shortfall will be within the £175 billion Budget forecast – this implies a seasonally-adjusted deficit of £17 billion per month over the remainder of 2009-10 versus an average of £13.5 billion in the last three months.