Retail sales recover slightly in July with 0.3% rise but long-term decline persists

UK retail sales rose in July but the longer-term downward trend in consumer spending shows no sign of abating, official data shows.

Sales increased by 0.3% in July, which was much higher than economists’ forecasts of a 0.2% drop, according to the Office for National Statistics.

But sales fell by 1.2% in the three months to July when compared with the previous period, continuing the decline since last summer.

Sales are 3.4% lower than last July in further evidence that people are tightening their belts amid the cost of living crisis.

A revision of June’s retail figures also put sales slightly lower, with a 0.2% drop rather than 0.1%, in a sign that shopping activity was slower than previously thought, the ONS reported.

ONS director of economic statistics Darren Morgan said: “Retail sales nudged up very slightly in July, but looking at the longer-term picture, they are continuing the downward trend which started last summer.

“Online sales did pick up this month, as retailers told us that sales were boosted by a range of offers and promotions.

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“However, fuel sales fell with some evidence suggesting the very hot weather meant fewer people travelling.

“Clothing and household goods sales declined again, with feedback continuing to indicate consumers are cutting back due to increased prices and concerns around affordability and cost of living.”

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The figures also showed food store sales rose by just 0.1% in July, a fall from the revised 2.7% increase in June when grocery spending was boosted by the Queen’s Platinum Jubilee weekend.

Read more:How everyday items have risen in price in the past 12 monthsThree things that need to happen for prices to return to normal

It comes as new research indicated consumer confidence is at an all-time low in light of “acute concerns” about the soaring cost of living and bleak economic outlook.

The Bank of England has warned that escalating inflation is likely to tip the UK into recession later this year.

The Consumer Prices Index (CPI) soared to 10.1% in the 12 months to July, up from 9.4% in June and remaining at the highest level since February 1982, driven by an increase in food prices on top of previous sharp rises in household energy bills.