British retail sales recorded their steepest monthly decline in almost a year in April, according to official data that points to weakening consumer demand amid higher energy costs, elevated interest rates, and ongoing global uncertainty linked to the Iran conflict.
Figures released by the Office for National Statistics showed retail sales volumes fell by 1.3% in April, reversing a 0.6% rise in March. The decline was sharper than economists had expected, with a Reuters poll forecasting a drop of around 0.6%.
The ONS said fuel sales were a key driver of the downturn, falling as motorists reduced consumption following a period of stronger demand in March, when households had stocked up in response to rising prices.
On an annual basis, retail volumes were unchanged compared with April last year, missing expectations for a 1.3% increase. The data adds to concerns that household spending is losing momentum after a period of resilience.
Samuel Edwards, head of client portfolio management at financial services firm Ebury, said consumer caution was deepening under mounting financial pressure. “Concerns around the impact of the Iran conflict on the cost of living, alongside higher mortgage costs and continued pressure on household finances, are weighing heavily on consumer confidence,” he said.
A separate survey released earlier in the day showed consumer sentiment edged higher in May but remained subdued overall. Households were found to be the least willing to make major purchases in nearly 18 months, reflecting ongoing uncertainty over income stability and future price pressures.
Retailers have also pointed to a challenging trading environment. Many say geopolitical instability, including the Iran war, is adding unpredictability to supply chains and consumer behaviour, while domestic tax rises and regulatory costs are squeezing margins.
Some companies, however, have managed to outperform expectations. Fashion chain Next reported stronger-than-forecast first-quarter sales, while electronics retailer Currys slightly raised its profit outlook, suggesting pockets of resilience in specific segments of the market.
At the same time, broader economic data is reinforcing concerns over the UK’s fiscal position. Separate figures from the ONS showed government borrowing came in higher than expected last month, adding pressure on Chancellor Rachel Reeves as she manages competing demands for public spending and debt control.
The latest retail figures highlight the fragile balance facing the UK economy, where weak household demand, high borrowing costs and external geopolitical risks are combining to slow consumption growth.
