UK retail sales fall for 10th month

The Confederation of British Industry's (CBI) monthly gauge of UK retail sales rose to -34 in July 2025, improving from June’s 17-month low of -46. Although the latest figure represents a modest recovery in sentiment, it still came in below market expectations of -26, highlighting that retailers remain under significant pressure.

The data underscores persistent weakness in the retail sector, with sales volumes declining for the tenth consecutive month amid elevated inflation, muted wage growth, and lingering economic uncertainty.

Households continued to rein in discretionary spending, as the cost of essentials such as food, energy, and housing remained historically high. At the same time, concerns over interest rates and potential job market softening have weighed heavily on consumer confidence.

Retailers across categories — from apparel and electronics to home goods — reported softer demand and higher operational costs, contributing to squeezed profit margins and reduced inventory turnover.

Looking ahead, the measure of expected sales for August improved slightly to -31, from -49 in the previous month, suggesting that businesses are cautiously optimistic about a potential bottoming out.

However, the improvement remains fragile, as many firms continue to cite uncertainty over monetary policy direction, supply chain disruptions, and geopolitical risks as key challenges heading into the autumn trading season. Without a significant pickup in real incomes or a broader economic rebound, the retail outlook remains subdued in the near term.