UK Retail Sales Up, Confidence Hits New Low

UK retail sales unexpectedly rose by 0.4% in March 2025, marking the third consecutive month of growth and the strongest quarterly increase since 2021, despite forecasts of a decline. The rise was driven by strong performance in clothing, outdoor, and DIY stores, aided by unusually sunny weather, while food store sales declined. Retail sales volumes remain slightly below pre-pandemic levels, indicating an incomplete recovery. Consumer confidence fell to its lowest since 2023 amid economic uncertainty linked to new global tariffs imposed by US President Donald Trump. Despite the retail boost, analysts and officials warn the positive trend may be temporary as rising household bills and international trade tensions persist. The Bank of England held interest rates steady but is expected to cut rates as economic headwinds mount.