UK Retail Sales Get Unexpected Boost in September from Gold Purchases

Official data released on Friday showed that British retail sales rose unexpectedly by 0.5% in September, marking the fourth consecutive month of growth, driven by stronger demand for computers, telecom products, and online gold jewelry.

Economists polled by Reuters had expected sales to fall by 0.2% from the previous month.

Compared with a year earlier, retail sales volumes were 1.5% higher, outperforming economists’ forecasts of a 0.4% annual rise.

UK retailers have enjoyed a solid run over the summer months, helped by unusually warm and sunny weather that boosted clothing sales.

Following the data release, sterling briefly strengthened against the U.S. dollar.

“Retail sales continued to rise in September,” said ONS statistician Hannah Finselbach. “Tech stores saw a notable uptick in sales, while online jewelers benefited from strong demand for gold.”

Gold prices have surged to record highs in recent weeks amid global market uncertainty.

Overall retail sales volumes in the third quarter rose 0.9% from the previous quarter, reaching their highest level since the third quarter of 2022.

Earlier on Friday, GfK’s long-running UK consumer confidence survey ticked slightly higher, with October’s reading at its strongest since August 2024.

However, economists noted that elevated savings rates continue to dampen overall consumer spending — a sign, they say, of lingering caution after the 2022 inflation spike, a softer jobs market, and worries about potential tax hikes in the November budget.

Recent updates from major UK retailers have been mixed. Tesco (TSCO.L), the country’s largest food retailer, raised its full-year profit outlook and said it was gearing up for a strong Christmas season. In contrast, Greggs (GRG.L) reported a slowdown in sales growth, and discount chain B&M (BMEB.L) issued two profit warnings in less than three weeks.