FX.co ★ UK Retail Sales Growth Cools Ahead of Budget

In September 2025, UK retail sales increased by 2% year-on-year on a like-for-like basis, showing a slowdown from the 2.9% growth recorded in August. This deceleration is attributed to prevailing concerns about inflation and the anticipated impact of potential tax hikes outlined in the forthcoming budget, which have collectively curbed consumer spending. The sales figure also did not meet market projections, which had anticipated a 2.5% increase. Notably, food sales experienced a 4.3% rise, driven by escalating grocery prices. In contrast, non-food sales saw a modest increase of 0.7%, with unusually warm weather deterring consumers from purchasing new autumn and winter clothing. Helen Dickinson, Chief Executive of the British Retail Consortium, commented, "With the budget drawing near and households grappling with higher expenses, retail spending has not accelerated as it did in recent months. The warmer weather meant that many postponed updating their autumn and winter apparel, and the growth in food sales was attributed more to inflation than to an increase in volume. However, electrical sales remained buoyant, thanks largely to the launch of the new iPhone and Apple Watch."