Retail sales in the United Kingdom unexpectedly rose in December 2025, adding to emerging evidence of a modest pickup in economic activity after months of subdued consumer spending.

Data published by the Office for National Statistics showed that retail sales volumes increased by 0.4 per cent month-on-month, reversing weaker results in October and November and surpassing forecasts that had anticipated a slight decline.

The monthly gain was driven in part by stronger online activity, with non-store retailers reporting increased demand, notably among online jewellers and other digital outlets.

Food sales also made a positive contribution alongside selective growth in non-food categories, while department stores and automotive fuel outlets lagged.

Over the course of 2025, retail sales volumes rose by 1.3 per cent, marking the second consecutive annual expansion after sharp contractions in the prior two years, though overall sales remain below pre-pandemic levels.

Economists and market analysts said the surprise uplift, coupled with rising consumer confidence reaching its best level since mid-2024 according to independent surveys, suggests households may be feeling less uncertain about their financial prospects following recent fiscal announcements and a moderation in inflationary pressures.

Despite the monthly rebound, retail sales for the fourth quarter as a whole were estimated to be slightly lower compared with the previous quarter, reflecting lingering headwinds in the broader economy.

Nonetheless, the December bounce — particularly driven by e-commerce — forms part of a cluster of indicators, including stronger business activity reported nationally at the start of 2026, that point to tentative strengthening in domestic demand.

Investors and policymakers are closely watching these trends as they weigh the outlook for consumer spending, interest rates and growth in the year ahead.