In August, UK retail sales surpassed expectations thanks to warmer weather that stimulated increased spending on food and clothing, as reported by the Office for National Statistics (ONS) on Friday.
Retail sales rose by 1.0% on a monthly basis in August, a significant acceleration compared to the 0.7% growth seen in July. Analysts had predicted a moderate increase of just 0.3%.
When excluding auto fuel, retail sales saw an even larger monthly gain of 1.1%, up from the previous month's 1.0% rise. This was well above the economists' forecast of a 0.5% increase.
The ONS attributed this growth to some supermarkets and clothing retailers, which experienced a surge in sales due to the warmer weather and end-of-season promotions.
Specifically, food store sales advanced by 1.8%, while non-food store sales increased by 0.6% compared to the previous month. On a yearly basis, retail sales growth improved markedly to 2.5% from 1.5% in July. This represents the highest annual growth rate since February 2022 and outstripped the anticipated 1.4% rise.
Similarly, excluding auto fuel, the yearly growth in retail sales was 2.3%, up from the 1.4% increase observed in the prior month, which exceeded expectations of a 1.1% rise.
Despite these gains, a survey by the GfK market research group revealed a sharp decline in UK consumer confidence in September, with the confidence indicator dropping to -20 from -13 in August.
Ashley Webb, an economist at Capital Economics, noted that the latest data suggests the retail sector might return to growth in the third quarter, potentially bolstering broader consumer spending. However, Webb warned that the dip in consumer confidence could signal that spending may be tempered by governmental budget decisions.
