UK Retail Sales Growth Hits 20-Month High

UK retail sales volumes rose by 1.8% month-on-month in January 2026, comfortably surpassing market expectations of a 0.2% increase and accelerating from a 0.4% gain in December. It marked the strongest monthly growth since April 2024, as interest rate cuts and easing inflation likely lifted consumer confidence across British shopping districts. It was also the first back-to-back increase in six months, offering a welcome boost to the Labour government’s efforts to revive the economy. Growth was driven by strong demand in non-food stores, particularly for artwork and antiques. Online and mail-order retailers also performed well, with sports supplements and jewellery sales reaching notably high levels. On an annual basis, retail sales volumes climbed to a near four-year high of 4.5%, from a revised 1.9% in December and above the expected 2.8%. Over the three months to January, sales volumes edged up 0.1% compared with the previous three-month period and were 2.6% higher than a year ago.