Retail sales jumped last month in the sharpest rise in over 18 months, as online retailers witnessed “unprecedented” demand for jewellery and robust orders for sports supplements during the New Year fitness drive. The Office for National Statistics (ONS) said the total volume of retail sales, which measures the quantity bought, rose by 1.8% in January, up from growth of 0.4% in December and the largest increase since May 2024.

The surge exceeded expectations, with most analysts predicting a modest 0.2% uptick last month. The ONS said online jewellers reported that demand “hit unprecedented levels” last month, with demand booming recently as gold prices jumped to record levels above 5,000 US dollars an ounce (£3,718).

Gold and silver have been bolstered as investors pursue “safe haven” assets amid ongoing geopolitical uncertainty.

January’s figures were also supported by New Year resolutions triggering strong demand for sports supplements online, whilst the ONS noted it proved a successful month for auctions of artwork and antiques.

Over the three months to January, sales climbed 0.1%, with the ONS revising its November estimate downwards to a 0.4% decline from the 0.1% drop initially reported.

Analysts said the latest figures showed consumer confidence had recovered following Autumn Budget uncertainty that dampened retail sales in November. Online sales witnessed a 3.4% surge last month and a year-on-year increase of 19.6%, whilst non-food shops also experienced a boost with sales rising by 2.2%, compared to a 1.2% rise for food shops.

Thomas Pugh, chief economist at RSM UK, said that the sales rebound last month “suggests that consumers are opening their wallets again as budget uncertainty recedes”.

He added there were “good reasons to be hopeful for retail sales over the rest of the year” as interest rates are anticipated to drop further, potentially as early as next month.

Mr Pugh said: “Confidence should continue to improve this year as inflation and interest rates come down and the housing market picks up.

“The big risk is a disruptive (Government) leadership contest which resurrects the spectre of tax rises and dampens confidence again.”

The retail sales performance offers a glimmer of hope for improved conditions for retailers following a challenging start to the year, marked by several firms falling into administration, including accessories retailer Claire’s, The Original Factory Shop, Quiz and footwear brand Russell and Bromley.

Rising costs and subdued consumer spending have exerted pressure on the high street.

Julie Palmer, managing partner at BTG, formerly known as Begbies Traynor, said: “Whilst the increase at the start of the year is very promising, and perhaps suggests that consumers held off until they fully understood how the budget was going to affect their finances, retailers will want to see consistency and certainty to the landscape going forward.

“Undoubtedly, retailers have had a tough past 12 months and after this bounceback all eyes will be on February’s sales figures to see whether this growth is sustained or temporary.”