Item 1 of 2 UK gold bullion bars and coins are displayed at Baird & Co in Hatton Garden in London, Britain, October 8, 2025. REUTERS/Hiba Kola
The Office for National Statistics said third-quarter sales growth of 0.9%, up from 0.2% in the second quarter, was likely to add 0.04 percentage points to third-quarter GDP growth, welcome news for an economy that has been forecast to slow in the second half.
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Economists polled by Reuters had predicted that retail sales would fall 0.2% in September. Sterling rose against the dollar after the data.
Retail sales had performed relatively strongly over the summer, helped by unusually warm weather boosting clothing sales.
ONS statistician Hannah Finselbach said tech store sales had risen notably, while online jewellers reported strong demand for gold.
RETAIL VOLUMES RISE TO HIGHEST SINCE Q3 2022
September retail volumes were 1.5% higher on the year, where economists had expected a 0.4% rise, driven by the fastest growth in online spending since April 2021. For the whole quarter, overall volumes were up 1.0% to their highest in three years.
However, many economists see clouds on the horizon.
“Against a backdrop of weak employment, high inflation and with tax rises on the horizon, we doubt the retail sector will be able to sustain this strength,” said Alex Kerr, UK economist at Capital Economics.
Consumer inflation has held at 3.8% for three months – almost double the Bank of England’s target – while wage growth is slowing and finance minister Rachel Reeves is expected to announce at least 20 billion pounds ($27 billion) of tax rises or spending cuts.
Updates from major retailers have been mixed.
Online technology retailer Shopify said its survey showed British shoppers expected to spend an average of 181 pounds on seasonal goods such as advent calendars and Christmas ornaments, up from 159 pounds last year.
($1 = 0.7451 pounds)
Reporting by David Milliken; editing by William James
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