UK Retail sales rose by 0.9% in January on a seasonally adjusted basis, after a 0.5% decline in December, UK's Office for National Statistics (ONS) said today. This was the largest rise since March and stronger than expected growth of 0.7%.
The recovery was even more pronounced if fuel sales were excluded, with sales up 1.6% per month, the largest increase since May 2018 and the biggest of all expectations.
Consumer demand in the latter part of 2019 faltered against the backdrop of parliamentary political deadlock over Brexit. This culminated in an early election in December that brought Prime Minister Boris Johnson back to office with a comfortable majority. Business and consumer sentiment have improved since then, with Britain leaving the EU on 31 January with an 11-month transitional agreement.
Sales at gas stations fell by 5.7% in January, the largest since April 2012, which the Office of Internal Protection linked to higher fuel prices, while clothing sales grew the most since May 2018 after several months of weakness.
However, annual sales growth remains weak, rising by only 0.8% year-on-year, following annual growth of 0.9% in December, generally in line with economists' expectations.
Excluding fuel, sales did not grow at all from August to December, the weakest rate since records began in 1996.
Earlier in 2019, consumer demand was strong, helping to support growth at a time when companies had put investment on hold until there was more clarity on Brexit.