UK Retail Sales Cool Amid Elevated Interest Rates
UK retail sales dipped by 0.5% in July, according to data released by the Office for National Statistics (ONS). The decline, which matches economists' expectations, signals a cooling in consumer spending amid persistent cost-of-living pressures and elevated interest rates.
The monthly drop was driven by reduced spending in food stores and non-food outlets, while online sales continued to capture a larger share of overall retail activity. Retail sales volumes dropped 0.5% in July compared with June, a figure that aligns with consensus forecasts.
On an annual basis, sales were 2.3% higher than a year earlier, though this reflects a low base following pandemic-related disruptions. The Bank of England has raised interest rates to a 15-year high, making borrowing more expensive and encouraging saving over spending.