UK—Retail Sales Firmer Than Expected in August

Economics Research 18 September 2026 | 10:09AM BST

UK—Retail Sales Firmer Than Expected in August

BOTTOM LINE: Headline retail sales volumes rose by 0.5%mom in August, whereas James Moberly | we and consensus had expected a decrease. Retailers indicated that the increase Goldman Sachs International reflected a recovery in sales after weaker July figures. Today’s figures imply a +2bp contribution to August monthly GDP growth from the retail trade, but our Q3 GDP tracking estimate remains at +0.5%qoq on rounding.

Retail Sales inc. Auto Fuel (August): +0.5%; GS: -0.5%; Consensus: -0.2%; Previous (July) -0.5% (unrevised); all %mom (non-annualised)

Retail Sales ex. Auto Fuel (August): +0.6%; GS: -0.2%; Consensus: -0.2%; Previous (July) -0.9% (unrevised); all %mom (non-annualised)

1. Headline retail sales volumes rose by 0.5%mom in August, an upside surprise compared to consensus expectations for a modest contraction. Sales excluding auto fuel rose by 0.6%, while fuel sales fell by 1.3%. Retailers noted a recovery in sales following weakness in July, when sales had fallen after demand was pulled forward to June because of earlier promotional activity. On a three-month on three-month basis, headline retail sales rose by 0.9%.

2. Today’s figures paint a firmer picture of consumer demand in August compared with the BRC retail sales data, which had shown the annual growth rate of retail sales values slowing. The data imply a roughly +2bp contribution from the retail trade to monthly GDP growth in August, whereas our forecast would have implied a -2bp drag on growth. Nonetheless, our Q3 GDP tracking estimate remains at +0.5%qoq.

3. Despite today’s firmer data, we continue to expect consumer spending growth to moderate later in the year. The real disposable income outlook looks soft given rising headline inflation and limited second-round effects into wages. It is true that the savings rate remains elevated and so has room to fall, but we think that this is unlikely to fully offset real income weakness given rising interest rates.

*Simone is an intern on the European Economics team

Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to

Sven Jari Stehn Filippo Taddei Alexandre Stott Goldman Sachs International Goldman Sachs International Goldman Sachs Bank Europe SE - Paris Branch

James Moberly Niklas Garnadt Katya Vashkinskaya Goldman Sachs International Goldman Sachs Bank Europe SE Goldman Sachs International

Giovanni Pierdomenico Goldman Sachs International