span>span>Friday 27th March 2026/span>span> - 07:55 (GMT)/span>/span>
UK retail sales volumes fell 0.4% month-on-month in February, following an upwardly revised 2.0% increase in January. The decline was smaller than market expectations of a 0.7% fall and marks the first contraction in three months.
Sales at supermarkets and household goods stores were the main drags on the headline figure, with retailers citing unusually wet weather and above-average rainfall as weighing on footfall and in-store activity.
Non-store retailers, primarily online, also recorded a modest decline. Anecdotal evidence suggests some demand was pulled forward into January, as consumers took advantage of seasonal discounting, leaving weaker spending momentum into February.
Despite the monthly drop, underlying trends remain relatively resilient. Retail sales volumes rose 2.5% on an annual basis, although this represents a slowdown from January’s 4.8% increase.
Over the three months to February, sales volumes increased 0.7% compared with the previous period, pointing to a modest expansion in consumer activity, albeit against a backdrop of rising energy costs and ongoing geopolitical uncertainty.
The latest data added fresh downward pressure on sterling, as concerns intensified over the conflict in Iran and its implications for UK growth. Rising energy prices linked to the crisis are expected to feed through into higher inflation, with the OECD warning that price growth could approach 4% under current conditions.
At the same time, market expectations for further Bank of England tightening have softened, with traders increasingly pricing in a prolonged pause in rates rather than additional hikes this year, leaving the pound vulnerable in the near term.
