EL7.AI
ForexMediumUpdated×4•Originally published 23 October 2026•Updated 23 October 2026•
4 min read

UK Retail Sales Volumes Fall 0.4% in September, More Than Forecast

Key Facts

1UK retail sales volumes fell 0.4% month over month in September, versus an expected decline of 0.1%.
2Annual volume growth slowed to 0.8% in September from 2.7% in August.
3Sales volumes rose 0.7% in the third quarter compared with the second quarter, and 1.5% compared with the third quarter of 2025.
4Services inflation accelerated to 3.7% in September from 3.4% in August, and core inflation rose to 2.8% from 2.6%.
5The Bank of England held interest rates at 3.75% in a 6-to-3 vote, with three members backing an increase to 4%.

UK retail sales volumes fell 0.4% month over month in September 2026, compared with expectations for a 0.1% decline, according to a reading cited by FXStreet. The drop followed a revision to August growth to 0.7% from an earlier estimate of 0.5%, according to ActionForex. Year over year, volume growth slowed to 0.8% in September from 2.7% in August, according to the same source. More broadly, volumes rose 0.7% in the third quarter compared with the second quarter, and increased 1.5% from the same period in 2025, according to the Office for National Statistics. The figures put September's monthly weakness alongside continued quarterly and annual sales growth.

Retail footfall fell 6% in September compared with August and was also 1% below its level in September 2025, according to the ONS’s real-time indicators report published on 22 October. The indicator measures visits to stores, while sales data measure purchase volumes; the fall in footfall therefore describes another aspect of consumer activity during the month. In its sales data, the ONS reported that mail-order sales fell in September. Online clothing retailers said sales of autumn and winter collections were affected by warmer weather. Department store sales also fell after growing in July and August, the ONS said.

The British Retail Consortium data provide a nominal-value reading: total sales rose 1.3% year over year in September, compared with 0.7% in August, but remained below the 12-month average of 1.5%, according to Reuters. These figures differ from the volume measure because they do not show the change after excluding the effect of prices. Meanwhile, core consumer price inflation accelerated to 2.8% in the 12 months to September, from 2.6% in August, according to the ONS. Services inflation rose to 3.7% from 3.4%, while goods inflation climbed to 3.2% from 2.7%. The consumer prices index including owner occupiers’ housing costs rose to 3.6%, up from 3.3% in the previous month.

The ONS said transport, particularly motor fuels, made the largest upward contribution to the monthly change in the annual rates of inflation for the consumer prices index and the consumer prices index including owner occupiers’ housing costs. The Associated Press reported that motor fuel prices rose 30% year over year through September, compared with 23% in August. At its September meeting, the Bank of England held interest rates at 3.75% in a 6-to-3 vote. The three dissenting members backed a 0.25 percentage-point increase to 4%, according to the bank’s minutes. The bank said consumer price inflation was 3.1% in August and was “likely to rise further over the coming quarters,” noting that energy price increases linked to the conflict in the Middle East threatened the inflation outlook.

At the same meeting, the Monetary Policy Committee unanimously took a separate decision to reduce its stock of government bonds purchased for monetary policy purposes to zero. The Bank of England said the stock would be reduced at an average pace of 46 billion pounds a year through the end of 2034. The plan includes annual sales of 20 billion pounds alongside maturing bonds. As for the next rate path, the Associated Press reported that economists expect a rate increase at the next meeting, scheduled for 5 November, and that most expect rates to reach 4%. Interest rates had been moving down from a peak of 5.25% before the war on Iran began in late February, the agency reported.

The September data come ahead of the 2026 autumn budget statement on 28 October, a date listed in ONS data. The real-time indicators report was published on 22 October, while 23 October was listed as the publication date for September retail sales data. The budget timing places the sales and inflation readings against the backdrop of debate over household spending and monetary policy. The third-quarter data, which showed growth in sales volumes, remain in contrast with the monthly decline recorded in September. The next rate decision, according to the Associated Press, is due on 5 November.