Finance
Surprise UK retail sales rise adds to signs of pickup in economy
Published by Global Banking and Finance Review
Posted on January 23, 2026
2 min readLast updated: January 23, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on January 23, 2026
2 min readLast updated: January 23, 2026
UK retail sales increased by 0.4% in December, contrary to economists' predictions of a 0.1% decline. Quarterly sales, however, fell by 0.3%.
Jan 23 (Reuters) - British retail sales rose unexpectedly last month, helped by strong online sales, according to data published on Friday which added to signs of a pickup in the economy after finance minister Rachel Reeves' budget.
Sales volumes rose by 0.4% in December from November, the Office for National Statistics said, marking a brighter end to an otherwise drab quarter for shops.
Economists polled by Reuters had expected sales to fall by 0.1% in month-on-month terms.
Earlier on Friday, market research firm GfK said consumer confidence rose to its highest level since August 2024 as households became more positive about their own finances.
For the fourth quarter as a whole, retail sales fell by 0.3%, reflecting declines in November and October, which the ONS said would exert a 0.01 percentage-point drag on overall economic output.
"Non-store retailers rebounded, with online jewellers confirming renewed demand for precious metals, following a lull in November 2025," the ONS said.
Compared with December a year ago, retail sales volumes were 2.5% higher, marking the strongest such reading since April.
Still, overall retail sales volumes remained 2.2% lower last month than their level six years ago, before the COVID-19 pandemic.
Major British retailers were generally cautious about 2026 prospects in their post-Christmas trading updates.
Food retail leader Tesco outperformed the wider market but Marks & Spencer disappointed with its clothing sales and Primark owner Associated British Foods warned on profit. Fashion retailer Next and electricals group Currys raised profit outlooks.
(Reporting by Andy Bruce, additional reporting by James Davey; editing by Sarah Young)
Economic growth is the increase in the production of goods and services in an economy over a period of time, typically measured by the rise in Gross Domestic Product (GDP).
Consumer perception is how consumers view and interpret a brand, product, or service. It influences their purchasing decisions and overall satisfaction.
A quarter is a three-month period on a company's financial calendar that acts as a basis for periodic financial reporting and performance evaluation.
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