LONDON, UNITED KINGDOM — British retail sales surprisingly rose overall in July but consumer confidence is at a record-low level as the UK heads towards recession under a new leader, data showed Friday.

Sales by volume gained 0.3 percent last month following a slight drop in June, the Office for National Statistics said, while analysts’ consensus had been for another fall.

Online purchases “were boosted by a range of offers and promotions”, said Darren Morgan, ONS director of economic statistics.

“However, fuel sales fell with some evidence suggesting the very hot weather meant fewer people travelling.”

Morgan added that another fall in sales of clothing and household goods indicated “consumers are cutting back due to increased prices and concerns around affordability and cost of living”.

Separate data Friday showed UK consumer confidence at a record low.

“With headline after headline revealing record inflation eroding household buying power, the strain on the personal finances of many in the UK is alarming,” said Joe Staton, client strategy director at GfK.

Its Consumer Confidence Index fell three points in August to -44, the lowest level since records began in 1974.

The Bank of England expects the UK economy to fall into recession by the end of the year as consumers struggle with soaring energy and food prices.

British inflation stands above 10 percent, the highest level in 40 years, triggering big rises in BoE interest rates that in turn are putting further strain on consumers.

Soaring interest payments 

The ONS on Friday added that interest payments on UK government debt surged more than 63 percent in July from a year earlier to £5.8 billion ($7 billion).

“Since mid-2021, the cost of servicing central government debt has increased considerably,” it said.

Sam Miley, senior economist at the Centre for Economics and Business Research, said ballooning interest payments reflected “the growing size of net public debt, as well as the mounting inflationary environment”.

Foreign Secretary Liz Truss, the favourite to replace under-fire Boris Johnson after he steps downs as prime minister next month, has pledged to cut taxes should she be voted into the top job by Conservative party members.

“The balance of risks to public finances has clearly shifted to the downside,” Michal Stelmach, senior economist at KPMG UK, said following Friday’s data.

“The cost-of-living crisis will likely require further support to households, while a slowing economy will put downward pressure on receipts.”