UK retail sales volumes jumped 1.8% mom in January, far exceeding expectations of 0.2% and marking the largest monthly increase since May 2024. The rebound suggests consumers began the year on firmer footing despite broader concerns over slowing growth.
On an annual basis, sales volumes rose 4.5% yoy, pointing to solid underlying demand. Over the three months to January, volumes edged up 0.1% compared with the prior three-month period and were 2.6% higher than a year earlier, indicating steady momentum rather than a one-off spike.
The data offer a counterbalance to recent signs of labor market softening and cooling inflation. While markets continue to price a March rate cut from BoE, resilient consumer spending may temper expectations for an aggressive easing cycle, particularly if inflation remains sticky in services.
