Chancellor Rachel Reeves has secured a surprise win ahead of her Autumn Budget next month as retail surges in Britain surged between July and August 2025, according to the latest figures from the Office for National Statistics (ONS).
Retail sales were 0.9 per cent higher in July over the period than in the previous three months with retailers citing good summer weather as being responsible for higher clothing sales in the quarter.
Based on the ONS figures, retail sales volumes are projected to have risen by 0.5 per cent in September 2025, following an increase of 0.6 per cent in August 2025, which was revised up from 0.5 per cent.
Notably, computer and telecommunications retailers’ sales volumes grew strongly alongside continued growth among non-store retailers, where online jewellers reported strong demand for gold.
The Chancellor has been handed a much-needed win ahead of next month’s Budget
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PA / ONS
Following the ONS’ publication of the latest retail sales data, sterling briefly rose against the dollar. The latest reading was a surprise increase after analysts predicted a decline of 0.2 per cent for the month.
Hannah Finselbach, ONS statistician, said: “Retail sales also grew over the month of September, with tech stores seeing a notable rise in sales, while online jewellers reported strong demand for gold.”
Despite this feather in the Government’s cap, the retail sector has struggled in the years following the Covid-19 pandemic, with store closures becoming the norm in Britain’s high streets.
The Centre of Retail Research previously forecast that as many as 17,000 shops could close throughout 2025 amid changing consumer habits and the hiked cost of doing business.
Retail sales are on the rise despite pre-Budget anxiety, the ONS figures show
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ONS
This month alone, Poundland, Halifax, New Look and Pizza Hut locations are leaving the high street for good, but analysts have noted the retail sector
Marty Bauer, senior ecommerce expert at Omnisend, said:: “Retail sales picked up in September as cooler weather and early autumn promotions encouraged shoppers to open their wallets again.
“Many households remain cautious, but they’re still making room for essentials and planned purchases rather than cutting back completely. The lift in computing and phone sales is also telling.
“September always brings a wave of back-to-school and university spending – from laptops and tablets to mobile upgrades and accessories. Those practical tech purchases are now a fixture of the new academic year and help explain why non-food categories saw better traction last month.
Retail sales are on the rise despite pre-Budget anxiety
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PA“All of that being said, the bounce in sales shouldn’t be mistaken for a full recovery. Footfall on the high street remains uneven, and inflation continues to squeeze real-world spending power. Consumers are highly responsive and quick to pull back when confidence dips.”
Consumer confidence rose marginally in October as shoppers prepare for the annual Black Friday sales event despite anxiety over the upcoming Budget, the latest figures have shown.
GfK’s long-running Consumer Confidence Index increased by two points, although it still languishes at minus 17.
The increase was largely driven by a four-point rise in the index’s major purchase marker, an indicator of confidence in buying big-ticket items, to minus 12 – a nine-point improvement on last October.
The high street has been hit with store closures in recent months. | PAExpectations for the general economic situation over the next 12 months also increased, by two points to minus 30, but marking a two-point decline on a year ago.
Neil Bellamy, consumer insights director at GfK, said: “After several years of high inflation, savvy consumers have adapted their purchasing strategies to make the most of their money when discounts are most attractive.
“Where possible, many now delay major purchases until one of these sales events – and the biggest of all is Black Friday, on November 28.
“Both consumers and UK retailers will be watching closely to see whether the Chancellor’s Budget, to be announced just two days before Black Friday, boosts or dampens spending during that crucial weekend.”
