UK retail sales drop by most in nearly a year as drivers buy less fuel

UK ONS data showed total retail sales volumes fell 1.4 percent month-on-month in April, against a 0.2 percent decline forecast. The reading represents the sharpest monthly contraction since May 2025; on a year-on-year basis, sales volumes are 1.7 percent lower. ONS economists said the principal driver was a 4.2 percent contraction in petrol station sales, with supermarket sales down 0.8 percent.

The decline in petrol station sales links directly to Brent crude above $102 a barrel and the average UK pump price reaching £1.72 per litre. Drivers are cutting purchases in response to price increases and postponing non-essential travel. RAC spokesman Simon Williams said 'this figure is a clear indicator of the additional Iran-war pressure on household budgets.' The British Retail Consortium BRC is concerned the May data could come in worse.

After the release, the pound eased from 1.3010 to 1.2950 against the dollar; the FTSE 100 was down 0.4 percent midday. Bank of England Monetary Policy Committee member Catherine Mann told the BBC that 'the data confirms short-term difficulty; we will continue to focus on inflation over the medium term.' Markets are pricing the Bank of England to hold rates at 4.75 percent at the June meeting; odds of an August cut have risen to 28 percent. Chancellor Rachel Reeves said no further fiscal support package is on the table.