Summer of sun and sport boosts retail sales - ONS
By Abigail Townsend
Date: Friday 05 Sep 2025
(Sharecast News) - Retail sales rose by more than expected in July, according to delayed data published by the Office for National Statistics on Friday.
Retail sales volumes are estimated to have risen by 0.6% in July, following an 0.3% increase in June. Analysts had been expecting a smaller 0.2% rise.
Year-on-year, sales were 1.1% higher, marginally below forecasts for a 1.3% uplift.
Both the warm summer weather and women's Euro 2025 football tournament helped bolster sales.
Clothing sales were particularly strong, jumping 2.5% over the month and by 5.5% over the year, the largest annual rise since January 2023.
On a three-month basis, however, the quantity of all goods bought fell by 0.6% when compared with the previous quarter, to April.
Falls in food, sports equipment, games and toys and household goods were attributed for the three-month decline.
Matt Swannell, chief economic advisor to the EY Item Club, said: "The outlook for the retailing sector is heavily dependent on the mood of consumers. Households seem likely to shed some of the significant caution that has characterised the past couple of years.
"However, softer earnings growth, higher inflation, tighter fiscal policy and the lagged impact of past interest rate rises for some mortgages point to much weaker real income growth moving forward."
The July data had initially been slated for publication on 22 August. But the ONS halted the release after it discovered an error in how it accounts for seasonally-adjusted sales.
The issue affected seasonally-adjusted data between January and May 2025, when some holiday effects - such as Easter moving - and "phase shift effects" were not properly accounted for.
The ONS said it had now corrected the error and had conducted a detailed annual review of all seasonally-adjusted parameters and settings.
The review has led to changes to this year's data, including June's 0.9% monthly growth rate being revised to 0.3% and May's 2.8% slide corrected to a more modest 1.0% decline.
Sales volumes in both January and April were also revised down significantly. January's 1.4% rise was changed to a 0.4% fall, while April's 1.7% jump is now a 0.4% decline.
James Benford, director general of economic statistics at the ONS, said: "The new figures published today show a similar pattern of three-month on three-month growth, but with less volatile month-on-month changes."
He continued: "I apologise for the delay to this release and for the errors in how we have been seasonally adjusting these data.
"Our economic statistics and surveys improvement plans will put more resources into improving the quality of statistics."
The issue was the latest in a series of problems that have undermined some of the ONS's key economic statistics this year, resulting in criticism from policy makers in both government and at the Bank of England.
Commenting on revisions, Swannell said: "The new profile looks more credible, but it's hard to have much confidence in the data when such fundamental errors have been made, and the revisions are so significant."
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