UK Retail Sales Growth Slows Amid Cautious Consumer Spending

UK retail sales growth decelerated more than expected in July, according to data from the British Retail Consortium (BRC). The organization's monthly monitor reported like-for-like sales up 1% year-on-year, falling short of the 1.5% forecast by economists.

The BRC attributed the slower growth to a combination of factors, including unseasonably cool weather that reduced demand for seasonal items and a more cautious consumer spending attitude amid ongoing cost-of-living pressures and higher interest rates.

Despite the slowdown, sales volumes remain in positive territory, but at a slower pace. The BRC noted that retailers have been relying on promotional activity to drive footfall and convert browsing into sales.

The miss on the BRC forecast adds to a mixed picture of the UK economy, with implications for the Bank of England's consideration of interest rates. A softer retail sales figure could support the case for a more cautious approach to monetary policy, as it suggests that higher borrowing costs are beginning to filter through to household budgets.