M&S womenswear and dividend boost shares

Marks & Spencer (M&S), the U.K. high street stalwart, reported a 1 percent rise in group sales to £4.9 billion ($7.8 billion) Wednesday, in a set of half-year results which were better than expected.

The retailer was one of the biggest gainers in European trading Wednesday morning, as its share price went 7 percent higher. It raised its interim dividend by by 0.2p to 6.4p per share, which was seen as a sign of management confidence.

This is the fourth first-half decline in profit before tax in a row for Marks & Spencer, with profit before tax down 0.4 percent to £279 million, as the biggest clothing retailer in the U.K. (by value) loses market share in clothing sales to high street rival Next. Sales of general merchandise (primarily clothes) were down 4 percent in the second quarter, the 13th quarterly sales declines in a row.

However, there was a bright spot in improved sales of women's clothing, the area of the business where much attention has been focused. Sales of women's clothes were up 1.3 percent in the first five months of the year, before being hit by an unseasonably warm September, like other retailers.

Marc Bolland, who took over as chief executive from Stuart Rose in 2010, has been under pressure to improve clothing sales in particular.

Food sales were up by 1 percent in the first half, as that side of the business continued to be more resilient than clothing.

The company said it is "well set up" for the key Christmas trading period.

This could be one of the trickiest Christmas periods for years for U.K. retailers, with food prices close to deflation, according to a survey by the British Retail Consortium on Wednesday.

In October, retail prices were 1.9 percent lower than in October 2013, suggesting that the pressure on retailers in the U.K. is set to continue.

- By CNBC's Catherine Boyle.