U.K. retail sales rose in August, but growth remained modest, highlighting continued pressure on consumers.
Data from the Office for National Statistics (ONS) showed retail sales increased by 0.5% in August, matching the revised growth rate of the previous month. Economists had forecast a smaller gain of 0.4%.
On an annual basis, sales rose 0.7%, slightly below July’s revised 0.8% increase. The ONS noted that sunny weather helped draw shoppers back to the high street, though momentum remains fragile.
Despite these improvements, retailers voiced concerns about the months ahead. The crucial Christmas period may face headwinds from potential tax hikes, which could limit consumer spending.
Chancellor Rachel Reeves is expected to raise taxes in her November budget after the Office for Budget Responsibility downgraded its productivity outlook earlier this week.
Meanwhile, the Bank of England left its benchmark interest rate at 4.0% during Thursday’s policy meeting. Governor Andrew Bailey said inflation is expected to return to the 2% target, but warned that future rate cuts must be gradual and cautious.
