ONS reveals error with its seasonally adjusted retail sales
Newsflash: Britain’s blundering statistics body has revealed another mistake with the data it produces to track the UK economy.
The Office for National Statistics has admitted that it has discovered an error in the way it produces seasonally adjusted British retail sales data.
The blunder relates to the treatment of “calendar effects”, such as the timing of Easter (which moves between March and April), and to the way that its default data collection periods are aligned to calendar months.
[The ONS uses default data collection periods on a four-week, four-week, five-week cycle, which then need to be aligned to calendar months].
ONS basically say the reason for the issues with quality assurance was seasonal adjustment by calendar month rather than trading month (the 4-4-5 split). ONS say they will switch to calendar month collection at the end of 2026.
— Harvir Dhillon (@HarvirDhillon) September 5, 2025
This error forced the ONS to delay the release of the retail sales data – they were initially due two weeks ago.
The ONS, which insists seasonal adjustment is important, reveals that the treatment of these holiday effects and “phase shift” effects were not properly accounted for between January and May this year.
The corrections mean that retail sales were actually lower than previously recorded in January, February, April and June, this chart from the ONS shows:
Photograph: ONS
These errors are another embarrassment to the Office for National Statistics; back in June, a report exposed “deep-seated” issues at the statistics body, which has been struggling to produce data on the state of the labour market too.
Today’s data also shows that the volume of goods bought by shoppers fell by 0.6% in the three months to July 2025 when compared with the three months to April 2025.
But in July alone, retail sales volumes are estimated to have risen by 0.6%, following an increase of 0.3% in June 2025.
Updated at 02.54 EDT
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Experts: ‘hard to have confidence’ in ONS data
The delay in publishing today’s retail sales data, alongside some large historical revisions, only add to the questions around the quality of the data, says Matt Swannell, chief economic advisor to the EY ITEM Club.
Swannell says it’s hard to have confidence in the Office for National Statistics’ data:
“The publication of today’s release was delayed by two weeks to ‘allow for further quality assurance’. The ONS revealed that this was to correct an error in its seasonal adjustment process. As a result, today’s release showed downward revisions to the level of sales in most months over the past couple of years, with some very large downgrades to specific months.
The most noteworthy were a 1.8ppt revision to the level of sales in January 2025 and a 1.7ppt cut to the April estimate. The new profile looks more credible, but it’s hard to have much confidence in the data when such fundamental errors have been made, and the revisions are so significant.
Retail analyst Nick Bubb, a long-time critic of the numbers produced by “Planet ONS”, has concerns about its non-seasonally adjusted data (which hasn’t been revised today):
The City expected a modest 0.2% increase in month-on-month seasonally adjusted sales volumes, so the 0.6% increase should please economists (although our friends at Capital Economics have said, in response, that “talk of tax rises ahead of the Budget may yet hold back retail and housing”), but there will be more interest in the big changes in the ONS ‘seasonal adjustment’ techniques, which means, for example, that the bizarre 2.8% dip reported for May has now been revised to a drop of only 1.0%, while the 1.7% increase in April has now been revised down to a 0.4% fall…
“Supermarkets had the largest contribution to headline correction and revision over the last 12 months’, according to the wretched ONS, but it also says, disappointingly, that ‘retail sales non-seasonally adjusted data are unaffected by this, as they refer to raw data where the effects of regular or seasonal patterns have not been removed’.
For us the main problem has always been the accuracy of the underlying sales value figures and our concerns have not been addressed: the Small Retailer sales figures in general have looked too optimistic for some time (implying sampling problems) and the Large Food Retailer sales figures in particular still look much too low in recent months (implying a lack of common sense at the ONS, in terms of cross-checking the widely available industry figures from the BRC-KPMG, as well as Kantar Worldpanel and NIQ).
UK retail sales in July were lifted by the women’s European football tournament,
The ONS reports that non-store retailers and clothing stores sales volumes grew strongly in July 2025.
Retailers attributed this to “new products, good weather, and an increase resulting from the UEFA Women’s EURO 2025 tournament”, which Wales and (winners!) England both took part in.
Following its corrections, the ONS has revised down the quarterly growth rate of retail sales from 1.3% to 0.7% in Q1 and up from 0.2% to 0.3% in Q2.
This will have a slight impact on the UK’s growth data for the first quarter of 2025.
ONS director-general James Benford explains:
Retail sales is used to measure the output of the retail sector and part of household expenditure. It accounts for 4.8% of GDP.
This means that the contribution of retail sales to GDP growth has been revised down from 0.06pp [percentage points] to 0.03pp in the first quarter and is unrevised to two decimal places in the second quarter.
These small corrections will be incorporated into GDP with the Quarterly National Accounts release at the end of September.
But as things stand, that shouldn’t lead to a downward revision to growth. The ONS says:
Despite the change in contribution, and all else being equal, GDP in Quarter 1 2025 would have been unchanged to 1 decimal place at 0.7%.
Updated at 03.12 EDT
ONS’s director-general apologises for retail sales error
The ONS’s director-general has apologised for the error discovered in the UK’s retail sales data (see earlier post), and the two-week delay getting today’s report.
James Benford, who was parachuted into the statistics body this year to lead its turnaround plan, explains that the approach to seasonal adjustment of retail sales is “unusually complex”.
He says, in a blogpost:
I apologise both for the delay to this release and the error in how we have been seasonally adjusting these data.
Benford adds that the ONS will conduct “a full lessons-learned exercise” and improve its processes and procedures to make sure the error will not be repeated.
But what exactly went wrong? Benford explains that the ONS failed to match its data to the reporting practices of retailers (such as supermarkets),
Many retailers report their sales on a ‘retail calendar’ basis which split the year into planning and reporting periods that have the same number of weekends, which tend to have a larger percentage of sales, and consistently align holidays and shopping events, such as Easter and Black Friday, each year. Reflecting that, our retail sales figures are collected for blocks of four weeks, four weeks and then five weeks (a ‘4-4-5′ approach) and can both sit within a month or span multiple months. This adds complexity to our seasonal adjustment process, given the need to align the collected data to calendar months. The process is complicated further by the pattern of the blocks of four and five weeks sometimes changing.
Our review revealed that we had not seasonally adjusted data correctly because we did not properly account for the adjustment in retail reporting calendars. We have now corrected for this mistake.
ShareHalifax: house prices at record high
UK house prices have hit a new record high, lender Halifax has reported this morning.
Halifax’s house price index shows that prices rose by 0.3% in August, the third monthly rise in a row.
That lifted the average property price to £299,331, a new record high.
Amanda Bryden, head of mortgages at Halifax, says:
“The story of the housing market in 2025 has been one of stability. Since January, prices have risen by less than £600, underlining how steady the market has been despite wider economic pressures.
Affordability remains a challenge, but there are signs of improvement. Interest rates have been on a gradual downward path for nearly two years, and many of the most competitive fixed-rate mortgage deals now offer rates below 4%.
Combined with strong wage growth – which has outpaced house price inflation for nearly three years – this is giving more prospective buyers the confidence to take the next step. Summer is typically a quieter period for the market, so the recent rise in mortgage approvals to a six-month high is an encouraging sign of underlying demand.”
However, rival lender Nationwide reported earlier this week that house prices fell in August, as high mortgage costs dampened activity, so the picture isn’t entirely clear….
ShareONS reveals error with its seasonally adjusted retail sales
Newsflash: Britain’s blundering statistics body has revealed another mistake with the data it produces to track the UK economy.
The Office for National Statistics has admitted that it has discovered an error in the way it produces seasonally adjusted British retail sales data.
The blunder relates to the treatment of “calendar effects”, such as the timing of Easter (which moves between March and April), and to the way that its default data collection periods are aligned to calendar months.
[The ONS uses default data collection periods on a four-week, four-week, five-week cycle, which then need to be aligned to calendar months].
ONS basically say the reason for the issues with quality assurance was seasonal adjustment by calendar month rather than trading month (the 4-4-5 split). ONS say they will switch to calendar month collection at the end of 2026.
— Harvir Dhillon (@HarvirDhillon) September 5, 2025
This error forced the ONS to delay the release of the retail sales data – they were initially due two weeks ago.
The ONS, which insists seasonal adjustment is important, reveals that the treatment of these holiday effects and “phase shift” effects were not properly accounted for between January and May this year.
The corrections mean that retail sales were actually lower than previously recorded in January, February, April and June, this chart from the ONS shows:
Photograph: ONS
These errors are another embarrassment to the Office for National Statistics; back in June, a report exposed “deep-seated” issues at the statistics body, which has been struggling to produce data on the state of the labour market too.
Today’s data also shows that the volume of goods bought by shoppers fell by 0.6% in the three months to July 2025 when compared with the three months to April 2025.
But in July alone, retail sales volumes are estimated to have risen by 0.6%, following an increase of 0.3% in June 2025.
Updated at 02.54 EDT
Introduction: US jobs report in focus
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
All eyes will be on the US employment market later today, for signs that America’s jobs market is cooling.
The latest non-farm payroll data is expected to show a slowdown in hiring – economists predict a rise of 75,000 in August. That would be slightly higher than the disappointing 73,000 increase reported in July – which spurred Donald Trump to fire the head of the Bureau of Labor Statistics
The US unemployment rate is set to tick up to 4.3%, from 4.2%
Another weak jobs report would harden fears that the US economy stumbled over the summer, as Trump’s trade war created confusion and drove up costs.
That would make investors even more confident that the US Federal Reserve will cut interest rates next week.
So the markets could be volatile at 1.30pm UK time today.
Chris Weston of brokerage Pepperstone explains:
We know the Fed has placed weight on the NFP outcome, so naturally market players are fixated on it too. This suggests the period around payrolls will be messy from a price action perspective, with algos reacting immediately to the numbers and liquidity thinning out.
How markets ultimately react is tough to plan for — the first move may not be the final move. The clear tactical play is to hold out and put money to work in trades once the collective has had some time to truly digest the data, assess its implications for Fed policy, and consider whether it possibly fuels concerns that the Fed is behind the curve or even that the labour market is perhaps more resilient than feared…
The agenda
7am BST: Halifax house price index for August
7am BST: US retail sales data for July
9am BST: UN FAO‘s food price index
1.30pm BST: US non-farm payroll jobs report