UK retail sales fall below market expectations

The contraction followed a 0.5% increase in the previous period, indicating weaker consumer spending. Annual retail sales growth slowed to 0.8%, below the 1.0% forecast and the previous 2.4% reading.

Core retail sales also fell 0.7% month over month, compared with expectations for a 0.1% decline. The sharp reversal from the previous 0.6% increase suggests weakening domestic demand. Softer consumer spending could weigh on the UK's economic growth outlook while supporting expectations for interest-rate cuts by the Bank of England (BoE).