Retail spending rose faster than expected last month in a boost for the government, as sales were lifted by “unprecedented” demand for online jewellers and auction items such as artwork and antiques.

Sales volumes rose by 1.8 per cent in January, the Office for National Statistics (ONS) said on Friday, the largest rise in more than a year and well ahead of analyst forecasts of a 0.2 per cent increase. Growth in the previous month had been 0.4 per cent.

Food store sales rose by 1.2 per cent on January, but it was non-food sales that drove growth. There was a particularly strong performance at commercial art galleries, alongside strong sales volumes for sports supplements and soaring demand at online jewellers, which have benefited over the past year from the higher price of gold and silver.

Sales in household goods stores jumped 3.2 per cent as retailers reported good seasonal sales of furniture. Clothing and footwear store sales edged up by 0.1 per cent, while other non-food stores rose 5.2 per cent.

Sales in department stores, which have been struggling to draw in shoppers for several years, dropped by 1.3 per cent.

The data mirrored separate findings from the British Retail Consortium, the sector lobby group, and KPMG, the consultancy, which showed that retail sales increased by 2.7 per cent on an annual basis in January, up from growth of just 1.2 per cent in the previous month, as a “drab December gave way to a brighter January” that saw consumers take advantage of the new year sales.

The rise in sales will feed hopes of a rebound in consumer spending amid early signs that the UK economy is recovering after a weak finish to 2025. However, some retailers are still concerned that higher spending on new year promotional deals indicates demand is being driven by price cuts rather than a revival in consumer confidence.

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For the three months to January, sales volumes edged up 0.1 per cent compared with the previous quarter and were 2.6 per cent higher year-on-year. Growth was driven partly by automotive fuel sales and non-food, with computer and telecoms retailers also reporting strong demand. Food stores dipped 0.2 per cent.

Hannah Finselbach, a senior statistician at the ONS, said: “Retail sales rose slightly in the latest three months as sales continued to pick up in the new year following a weak November. Motor fuel sales increased a little across the period, while sales of artworks, tech retailers and furniture stores also performed well. These were partially offset by falls in supermarket sales.”

UK inflation fell sharply in January to 3 per cent, the lowest level in nearly a year, driven down by airfares, petrol and food prices despite rising costs of hotels and takeaways. Food inflation dropped to 3.6 per cent year-on-year in January, its lowest level since last April and down from 4.5 per cent in December.

Lower inflation, struggles with economic growth and higher unemployment have raised expectations that the Bank of England will cut interest rates to 3.5 per cent from 3.75 per cent at its next meeting on March 19. Interest rates were lowered four times in 2025.