(Feb 20): UK retail sales started the year with the fastest growth in 20 months, an unexpected surge that could boost the Labour government’s efforts to revive the economy.
The total volume of goods sold online and in stores surged 1.8% in January, according to the Office for National Statistics (ONS), picking up pace from December’s 0.4% increase and marking the first back-to-back growth in six months. It was stronger than the 0.2% rise predicted by economists.
The numbers were lifted by fuel sales, while the ONS also pointed to strong sales of artwork and antiques, alongside continued high numbers from online jewellers.
The report adds to evidence that the all-important British consumer is spending again, after a 2025 marked by fears of tax rises, job losses and slower pay gains. Households emerged relatively unscathed from Chancellor of the Exchequer Rachel Reeves’ November budget, as many tax hikes were deferred.
“Online sales have been a particular bright spot, likely boosted by the wet weather,” said Sandra Prince at Lloyds, a bank. Non-store retailing, which includes online commerce, rose 3.4% on the month according to the ONS.
Interest rate cuts and falling inflation are also likely to have improved the mood in British shopping districts. Still, Paul Dales from Capital Economics warned: “With employment growth weak and wage growth slowing, households won’t be able to maintain this rate of spending.”
See also: Lagarde's ‘baseline’ is to finish term as ECB president — WSJ
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