UK retail sales jumped 1% in June, defying forecasts for a decline and pointing to resilient household spending. Online retailers and clothing stores led the rebound, helped by promotions and the second-warmest June on record. Fuel demand stayed weak, and one forecaster cautioned that the strength may prove temporary.
British shoppers spent more than forecasters expected last month. UK retail sales volumes rose 1% in June, far exceeding predictions for a 0.3% decline and following an unrevised 1.2% gain in May. Measured against a year earlier, sales climbed 4.2%, beating expectations for a 2.3% rise.
Online and clothing drive the rebound
The breadth of the gain stood out. Excluding automotive fuel, sales still rose 1.1% on the month, signalling strength across categories rather than a single distortion. Non-store retailing was the standout, surging 4.4% on the month as shoppers bought outdoor products, fans and sports merchandise.
Clothing stores added to the momentum. Their 1.9% monthly rise was the largest since September 2025, which retailers attributed to promotions and warm weather. The share of spending done online reached 29.4% in June, up from 28.9% in May and the highest proportion since April 2021.
Warm weather does much of the lifting
Temperature may explain much of the jump. The Met Office recorded June 2026 as the second warmest on record, and retailers tied the extra demand to seasonal buying. Over the second quarter, volumes rose 0.6% from the first, a steadier pace than the monthly figure suggests.
Fuel was the clear weak spot. Sales fell 0.8% on the month and 6% over the quarter after motorists stocked up in March during the Middle East conflict, then cut back as pump prices climbed.
A cushion that may not last
For the pound, the data reinforces a picture of domestic demand that keeps holding up despite high borrowing costs. Yet the outlook is guarded: Capital Economics said some of the strength reflects temporary weather effects and expects consumer spending to stay largely flat in the coming quarters. The report at least eased fears of stagflation for now, even if that debate is unlikely to fade in the second half of the year.
Sources: Office for National Statistics, ActionForex, InvestingLive, Investing.com
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