UK retail sales fell by 0.5% in July, according to the Office for National Statistics, reversing a 1% rise in June despite the World Cup drawing crowds to pubs and hot weather boosting drink sales in supermarkets. The dip suggests the resilience British shoppers have shown in the face of high energy costs and geopolitical tensions may be starting to fade, with economists noting that many households had already bought summer essentials earlier in the season.

The decline was driven largely by weaker non-food sales, as retailers had brought forward promotions to June to capitalise on the earlier heatwave, leaving July comparatively quiet for clothing and household goods. Alcoholic drinks and beverages were the standout performers, benefiting from promotions, warm weather and World Cup-related trade. Despite the monthly fall, ONS chief economist Grant Fitzner noted sales grew across the latest three months in nearly all sectors bar motor fuel. Separately, UK consumer confidence rose to a two-year high in July, according to GfK, even as inflation ticks up and tensions between the US and Iran push oil prices to one-month highs.