UK retail sales were stronger than expected last month, as the nation’s shops received a surprise boost during the crucial Christmas trading period.
Sales volumes across Great Britain rose by 0.4% in December, according to figures from the Office for National Statistics (ONS), with internet sales doing particularly well, especially online jewellers.
Economists had been expecting retail sales to fall by 0.1% compared with November, after a number of British stores reported lacklustre trading over Christmas. Retail sales had also fallen in October and November.
Over the final three months of the year, known as the “golden quarter” for retailers, sales fell by 0.3%, marking a sharp slowdown from growth of 0.6% in the previous three months.
Separately, a closely watched survey from the market research firm GfK said consumer confidence rose to its highest level since August 2024 in January, as households became more positive about their own finances.
Hannah Finselbach, a senior statistician at the ONS, said: “The last three months of the year saw a slight drop in retail sales after a strong third quarter, with supermarkets and online stores both down.”
However, December enjoyed a boost from internet jewellers who reported “higher demand for gold and silver”, after a slight lull in November. Gold is considered a safe haven commodity and has experienced a record-breaking price rally, nearing $5,000 an ounce, amid global macroeconomic uncertainty.
Economists said the uptick in December sales suggested consumers were gaining confidence after the expected impact of the chancellor Rachel Reeves’s late November budget was less severe than feared, with most tax increases not occurring until later in the parliament.
Elliott Jordan-Doak, a senior economist at Pantheon Macroeconomics, said: “Retail sales rebounded in December as months of tax-hike uncertainty faded, allowing consumers to return to the high street with more confidence around their personal finances.”
Online sales volumes rose by 4.2% in December compared with November, while there was also a small rise for supermarkets and sales of fuel. However, non-food stores, such as department and clothing shops, fell by 0.9% on the month, while typically popular Christmas items such as electricals, books, and health and beauty all recorded a drop in sales.
Across 2025 as a whole, there was a second consecutive annual rise in retail sales, increasing by 1.3%, after large falls in 2022 and 2023, but volumes still remained below levels seen before the Covid pandemic struck. Sales in the final quarter of 2025 remained about 2% below 2019’s pre-pandemic levels.
Martin Beck, chief economist at WPI Strategy, said this underscores “the ongoing pressures from high living costs, elevated borrowing rates, and fragile consumer confidence”.
