UK Retail Sales Brighten in July Amid Broader Sector Challenges

Retail sales in the UK for July 2025 were surprisingly strong, climbing 0.6% against expectations of 0.2%. This represented an improvement from June's revised 0.3% gain, yet annual growth lagged at 1.1% against a 1.3% forecast. Despite these advancements, the three-month trend continued downward with sales down 0.6%, thereby ending a run of four straight quarters of positive growth.

Favourable weather and events like the UEFA Women's Euro 2025 propelled sector-specific growth, which helped food store revenue to reach their highest levels since February 2022, increasing by 2.5%. Non-food stores increased 0.6%; internet sales showed significant increases. But when data quality caused delays and changes, growth numbers were recalculated to show overstatements in the first half of 2025. For instance, June's growth was abruptly lowered from 0.9% to 0.3%, and the changes somewhat lowered Q1 GDP growth forecasts.