UK retail sales delivered a surprise boost in February, rising by 1 per cent month-on-month and defying expectations of a downturn, as consumers continued to spend on clothing, homewares and household goods despite lingering economic uncertainty.
The latest figures from the Office for National Statistics (ONS) mark the second consecutive month of growth in retail volumes, with analysts having forecast a 0.4 per cent contraction. Annual retail sales growth also strengthened to 2.2 per cent, up from 0.6 per cent in January.
Non-food store sales, including clothing and department stores, rose by 3.1 per cent — the highest monthly level since March 2022. Food sales, however, fell back by 2 per cent following a strong 4.8 per cent increase in January.
Hannah Finselbach, senior statistician at the ONS, said: “Retail sales jumped again in February, with increases across most sectors. However, after a very strong January, food sales fell back, particularly across supermarkets.”
She added that it was a particularly strong month for household goods stores, which saw their biggest increase since April 2021 — largely driven by hardware store sales. Clothing also saw a moderate lift, with widespread discounting contributing to the uptick.
“Looking at the wider trend, retail sales are now showing growth across both the three-month and annual period but remain below pre-pandemic levels,” Finselbach said.
The figures have raised hopes that the Bank of England could begin cutting interest rates sooner than expected, particularly if inflation continues to ease. February’s inflation reading came in at 2.8 per cent — down from 3 per cent in January — offering a timely boost to Chancellor Rachel Reeves as she delivered her spring statement.
However, the inflation outlook remains uncertain. Rising wholesale energy prices and food costs are expected to push inflation back up later this year, with the Bank warning it could peak around 3.7 per cent. Meanwhile, the Office for Budget Responsibility has downgraded its UK growth forecast for 2025 to 1 per cent, while revising its inflation forecast upward to an average of 3.2 per cent.
Despite persistent pressures on household budgets and muted consumer confidence, February’s data suggests many shoppers are still willing to spend — especially on discounted goods and non-essentials — keeping the high street ticking over for now.