UK retail sales unexpectedly rose to their highest level since July 2022 in September, driven by strong demand for gold and the release of the iPhone 17, according to official figures. The Office for National Statistics (ONS) reported a 0.5% increase in retail sales volumes, the fourth consecutive monthly rise, defying economists' forecasts of a 0.2% decline.
Online sales climbed for the eighth straight month, boosted by internet jewellers reporting robust demand for gold as the safe-haven commodity rallied amid global uncertainty. Sales at computer and telecommunication retailers also grew strongly. Non-food stores, including department stores, clothing, and household goods, saw the largest rise at 0.9%.
Total sales volumes increased by 1.5% year-on-year in September, and the ONS revised August's monthly growth up from 0.5% to 0.6%. However, volumes remain 1.6% below pre-pandemic levels from February 2020. The September figures followed a strong summer, aided by warm weather and the Euro 2025 women's football tournament, with quarterly sales rising 0.9% between July and September compared with the previous quarter.
Despite the positive data, industry experts warned the trend may not continue due to high inflation, weakening employment, and potential tax rises. Rachel Reeves's 26 November budget falls just before Black Friday discounting, and consumers are tightening spending as retailers prepare for Christmas. Nicholas Found of Retail Economics noted that shoppers are cautious, with budgets squeezed by essential living costs, and the budget timing could worsen competition for limited discretionary spend.
