UK retail sales saw an unexpected rise in February, growing by 1% month-on-month and surpassing forecasts of a downturn. Consumers continued to spend on clothing, homewares, and household goods despite ongoing economic uncertainty, according to the latest figures from the Office for National Statistics (ONS).
This marks the second consecutive month of growth in retail volumes, with analysts having predicted a 0.4% decline. On an annual basis, retail sales growth also strengthened to 2.2%, up from 0.6% in January.
Non-food store sales, including clothing and department stores, saw a significant 3.1% increase—the highest monthly rise since March 2022. However, food sales declined by 2% following a strong 4.8% surge in January.
“Retail sales jumped again in February, with increases across most sectors. However, after a very strong January, food sales fell back, particularly across supermarkets,” said Hannah Finselbach, senior statistician at the ONS.
Household goods stores experienced their largest sales boost since April 2021, largely driven by strong hardware store sales. Clothing retailers also saw a moderate increase, supported by widespread discounting.
“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 added.
The strong sales figures have fueled speculation that the Bank of England may consider cutting interest rates sooner than anticipated, particularly if inflation continues to ease. February’s inflation rate stood at 2.8%, down from 3% in January, providing a timely boost to Chancellor Rachel Reeves as she delivered her spring statement.
However, the long-term inflation outlook remains uncertain. Rising wholesale energy prices and food costs could push inflation back up later this year, with the Bank of England warning it may peak at around 3.7%. Meanwhile, the Office for Budget Responsibility has downgraded its UK growth forecast for 2025 to 1% and revised its inflation forecast upward to an average of 3.2%.
Despite financial pressures on households and fragile consumer confidence, February’s data suggests that many shoppers are still willing to spend—particularly on discounted goods and non-essential items—helping to keep the retail sector resilient for now.
