British retail sales rose in January for the first time since August and by more than expected, according to official data that suggests consumers happy to spend even though there is a weak view for the economy.
Profit of 1.7% month to month in sales volume is greater than all estimates in the Reuters of Economist poll that has shown median estimates for an increase of 0.3%.
Sterling jumped almost one fifth of one cent by the US dollar after the numbers were issued by the National Statistics Office on Friday.
Paul Dales, an economist with economic capital consultation, said the figures suggested the retail sector “shot out of the block” in early 2025.
“But some of these forces will sacrifice weaknesses in other parts of the economy,” he said, pointing to strong growth in the sale of food that might hurt the hotel sector.
“And with a household in a mood that is quite depressed, we doubt it will survive,” said Dales.
A survey published earlier on Friday shows that British consumers are only a little less pessimistic this month.
Separate ONS data shows that the British run a budget surplus that is smaller than estimates in January, maintaining the prospect of further expenditure or an increase in Fresh Tax by Minister of Finance Rachel Reeves to remain on its target for public finances.
January monthly sales were the fastest since last May and marking pickups after a depressed sense of the economy last year was triggered by the new government of Prime Minister Keir Starmer ahead of Reeves’s first budget in October.
The retail sales volume for three months until January fell 0.6% compared to the previous three months, which reflected weaknesses at the end of last year.
Compared to the previous year, retail sales in January rose 1.0%, stronger than the estimated median for growth of 0.6%.
Most of the main British retailers, including the next NXT and Mars & Spencer MKS, have marked a more difficult year ahead as an increase in the reeves employer tax, and its potential impact on price and work, filtering into the economy.
Data published earlier this week shows inflation rose more than expected in January when recruitment and salary growth were also stronger than expected. But this month’s Bank of England reduced the estimated economic growth in 2025.
It is said to be moving gradually and carefully by cutting further interest rates.
The SBRY supermarket group, Tesco Tsco, and Morrisons from Sainsbury have announced 3,600 job cuts in recent weeks.
Source: Reuters
