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Retail sales in the UK unexpectedly increased 0.4 per cent in December, snapping two months of declines, as consumers bought more jewellery online.
The rise in sales volumes from the previous month, reported by the Office for National Statistics on Friday, was above the 0.1 per cent contraction forecast by economists polled by Reuters.
It followed a 0.1 per cent drop in November and a revised 0.8 per cent fall in October.
Hannah Finselbach, ONS senior statistician, said online sales were strong in December, adding that “within this, online jewellers had a strong month and told us there was higher demand for gold and silver”.
Despite December’s pick-up, sales volumes for the final three months of the year, the busiest period for retailers, were down 0.3 per cent from the previous three-month period.
“The last three months of the year saw a slight drop in retail sales following a strong third quarter, with supermarkets and online stores both down,” Finselbach said.
For 2025 as a whole, retail sales rose, marking the second consecutive annual increase after steep declines in 2022 and 2023. Sales volumes still remained below their pre-pandemic level, according to the ONS.
The figures provide “reinforcing signs that the UK economy struggled to gain momentum at the end of 2025”, said Martin Beck, economist at WPI Strategy.
With inflation and interest rates set to fall further this year, real pay still rising and a small rise in consumer confidence, households may become more willing to spend, he added.
But he cautioned that “the shift towards lower savings and higher borrowing could take time to materialise fully”.
The pound strengthened slightly after the data, but was still down 0.1 per cent against the dollar in the session at $1.349.