UK retail sales beat expectations; UK government borrowing rises

UK retail sales rose at a faster pace than expected in August, numbers from the Office for National Statistics showed Friday, while public sector borrowing for last month hit a five-year high.

The ONS said retail sales volumes perked up 0.5% in August from July. They had risen 0.5% in July from June, a growth rate downwardly revised from 0.6%.

The latest figures were expected to show a 0.4% monthly rise for August, according to FXStreet, so the data beat expectations.

On-year, retail sales rose 0.7% in August, beating the FXStreet cited forecast of a 0.6% rise.

Separate data showed UK government net borrowing rose to GBP17.96 billion, from GBP2.82 billion in July. It was up on-year from GBP14.24 billion and is the loftiest August borrowing figure for five years.

The latest figure was ahead of FXStreet's cited consensus, which expected a net borrowing figure of GBP12.5 billion.

"Borrowing in the financial year to August 2025 was GBP83.8 billion; this was GBP16.2 billion more than in the same five-month period of 2024 and the second-highest April to August borrowing since monthly records began in 1993, after that of 2020," the ONS added.

"The current budget – borrowing to fund day-to-day public sector activities – was GBP13.6 billion in August 2025; this brings the total current budget deficit in the financial year to August 2025 to GBP62.0 billion, which is GBP13.8 billion more than in the same five-month period of 2024."

The ONS added: "Public sector net debt excluding public sector banks was provisionally estimated at 96.4% of gross domestic product at the end of August 2025; this was 0.5 percentage points more than at the end of August 2024 and remains at levels last seen in the early 1960s."