London Daily

Focus on the big picture.
Saturday, Sep 12, 2026

Retail sales pick up as consumer confidence rises to 'highest level in a year'

Retail sales pick up as consumer confidence rises to 'highest level in a year'

Discount department stores and grocery chains led growth last month, according to official figures, but the ONS says the big picture for retail remains subdued due to the cost of living crisis.

Official figures have shown a much larger than expected pick up in retail sales last month as a closely-watched measure of consumer confidence reaches its highest level in a year.

The Office for National Statistics (ONS) reported a 1.2% rise in sales volumes in February compared to the previous month, adding that the performance took sales back to their pre-COVID era level.

It was much better than economists had predicted as only a slight uptick was expected amid the continuing cost of living crisis.

The ONS also revised sharply upwards, to 0.9%, the 0.5% volume growth it had originally recorded for January after the tough Christmas for the high street.

Its director of economic statistics, Darren Morgan, said: "Retail grew sharply in February with sales returning to their pre-pandemic level.

"However, the broader picture remains more subdued, with retail sales showing little real growth, particularly over the last eighteen months with price rises hitting consumer spending power.

"In the latest month, discount department stores performed strongly with food shops also doing well as consumers, confronted with cost-of-living pressures, cut back on eating out or purchasing takeaways.

"After rail strikes increased car travel in January, fuel sales fell back in February," he also noted.

The data was released against a backdrop of recent indications that the economy is slowly picking up, and performing better than a slew of dire forecasts had predicted.

Market research firm GfK's consumer confidence index rose to -36 in March.

While still deep in negative territory, it was its highest level for 12 months and was boosted by improving sentiment around the economy despite persistent gloom over personal finances.

The latest results were published less than 24 hours after the Bank of England indicated that it was no longer expecting a technical recession this year - defined as two consecutive quarters of negative growth.

Its shift chimed with the view of the Office for Budget Responsibility's (OBR's) latest assessment - released on budget day last week.

The more optimistic outlook followed dire predictions earlier this year from the International Monetary Fund, and other prominent organisations, that the UK would be the weakest performer within the developed world in 2023 because of the hit to consumer spending power from inflation.

A separate ONS report this week measured the consumer prices index at 10.4% in February - up from 10.1% the previous month.


Economists had widely expected an easing in the rate but the report charted upwards pressure from the salad shortage and an end to January pub drink discounts.

Food and drink inflation struck a 45-year high, the report showed, and the Bank of England later acted through another interest rate rise to try and keep a lid on the pace of price growth.

The OBR said last week that it expected inflation to ease back to 2.9% by the year's end but it is clear higher living costs will continue to prove a drag on spending well into the future.

Joe Staton, client strategy director at GfK, said of its findings: "A small improvement in the overall index score this month masks continuing concerns among consumers about their personal financial situation.

"Wages are not keeping up with rising prices and the cost-of-living crisis remains a stark reality for most."

He added: "Just having enough money to live right and pay the bills remains the number one concern for consumers across the UK."

Newsletter

Related Articles

0:00
0:00
Close
UK Reviews Nationwide Emergency Alert Tests After Systems Meet Reliability Targets
UK Seeks Faster Rail Links Across Northern Industrial Corridors
British Business Bank Allocates £150 Million for High-Growth Companies in Northern England
BBC Warns Staff Strikes Are Possible Amid Pay Dispute and £500 Million Savings Drive
UK Backs Short Extension of UN Sudan Sanctions Regime
Prime Minister Andy Burnham Defends Early Prison Release Reforms and Growth Strategy
Reform UK Faces Scrutiny Over Alleged Effort to Circumvent Foreign Donation Rules
UK Analysts Warn Tax Rises or Spending Cuts May Be Needed to Preserve Fiscal Headroom
Jaguar Land Rover Plans Up to 4,000 Job Cuts in £1.7 Billion Cost-Saving Drive
UK Chancellor Warns of Difficult October Budget as Borrowing Costs Rise
UK Declares Israeli Occupation of West Bank Unlawful and Expands Sanctions
UK House of Commons Rejects Assisted Dying Bill for England and Wales
English Councils to Gain Power to Introduce Tourist Taxes by 2028
Kemi Badenoch Reshuffles Conservative Shadow Cabinet
Firefighters Make Progress Containing Major Wildfires in South Wales
John Lewis Partnership Reports £124 Million Loss
Study Says UK AI Data Centres Will Create Only a Quarter of Forecast Jobs
UK Government Considers Higher Industrial Water Prices Amid Supply Pressures
Andy Burnham Holds First Call With Donald Trump as UK Prime Minister
NHS Records Busiest Summer on Record as Heatwaves Drive Hospital Admissions
Home Secretary Orders Police Crackdown on Far-Right Anti-Migrant Vigilantes
UK Supreme Court Rules Northern Ireland Religious Education Curriculum Breaches Human Rights Standards
Markets Price in Four Bank of England Rate Rises by Next Summer
House of Commons Prepares Free Vote on Assisted Dying Bill
UK Government Bans Trade With Israeli Settlements in Occupied Territories
UK Economy Grows 0.4% in July as Artificial Intelligence Investment Supports Expansion
Andy Burnham Becomes UK Prime Minister After Keir Starmer Resigns
John Lewis Partnership Loss Widens to £124 Million
UK Government to Put White Working-Class Social Mobility at Centre of Equality Policy
McLaren Plans £450 Million Technology Investment Creating 1,000 UK Jobs
UK Chancellor Faces Calls for Wealth Taxes and Public Ownership in Autumn Budget
English Mayors to Gain Powers to Impose Uncapped Overnight Tourist Taxes
JPMorgan’s Jamie Dimon Warns UK Government Against Bank Windfall Taxes
UK Air Traffic Control Outage Cancels More Than 2,000 Flights
UK Imposes Trade Ban on Israeli Settlements in the West Bank
UK Borrowing Costs Surge as Middle East Tensions Push Long-Term Gilt Yields to Highest Since 1998
Buckingham Palace Says Prince Harry and Meghan Will Not Resume Official Royal Duties
UK Treasury Faces Calls to Scrap £100,000 Childcare Support Threshold
Trades Union Congress Urges Labour Government to Rewrite Migration Policy
Riot Police Deployed After Anti-Migrant Protests Turn Violent in Portsmouth
UK Considers Replacing Some Disability Cash Payments With Direct Services
JPMorgan’s Jamie Dimon Warns UK Chancellor Against Higher Banking Taxes
UK Announces New Sanctions Targeting Israeli Settlements in West Bank
Metropolitan Police Investigate Alleged Illegal Donations to Reform UK
UK Charges Wiltshire Man With Assisting Russian Intelligence
UK Orders Urgent Review After Air Traffic Failure Cancels More Than 2,000 Flights
Merz Rebukes AfD Expansion in Saxony-Anhalt
King Charles Confirms Prince Harry and Meghan Will Remain Private Citizens
Labour Selects Former Child Refugee for By-Election in Keir Starmer’s Former Seat
Foreign Private Equity Accelerates Takeovers of London-Listed Industrial Companies
×