UK households cut back spending at fastest rate in 18 months, Barclays says | Consumer spending
Households cut spending at the fastest pace in 18 months in April as conflict in the Middle East sparked fears of a new cost-of-living crisis, according to a report from one of Britain’s biggest banks.
Barclays, which processes about 40 percent of credit and debit card transactions in the UK, said its data showed a 0.1 percent decline in card spending last month compared to the previous year. This was the first annual decline since November 2024.
The bank, which analyzes hundreds of millions of transactions made with debit and credit cards each month, said non-essential spending fell 0.3% as consumers cut back on discretionary spending.
Travel spending fell 5.7% in April, following a 3.3% drop in March; airlines down 8.3%; Food and beverage expenditures remained stable in April.
But perhaps in a sign that households are choosing to stay at home and save money, spending on digital content and subscriptions rose 9.2% in April compared to the previous year, with Barclays saying this was “also boosted by the popularity of TV series Euphoria, The Testaments and The Pitt”.
Fuel expenses increased by 10.4%, while basic expenses increased by 0.3%. This is the largest increase since December 2022, when Russia’s invasion of Ukraine caused a rise in gasoline and diesel prices.
The figures follow a series of surveys and reports suggesting consumers and businesses are bracing for tough times ahead as the Iran war shakes energy markets and disrupts global supply chains.
The Bank of England last week warned that high inflation in the UK was “inevitable” as a result of the Iran war, with typical energy bills likely to rise 16% to £1,900 by the summer and food prices to rise 7% by the end of the year.
A survey conducted by Barclays alongside spending data found that 72% of consumers expect tensions in the Middle East to impact living costs through 2026, with energy bills, inflation and food prices being the biggest causes of concern.
Confidence in non-essential spending has fallen to 49%, its lowest level since March 2023, but 52% say they can manage their day-to-day finances without serious stress.
Jack Meaning, chief UK economist at Barclays, said: “The key unknown for the UK outlook is how long this uncertainty will last. If confidence is subdued for too long and consumers continue to limit their spending as a result, it will be difficult for households and businesses to weather the storm.”
A separate report by the British Retail Consortium and consultancy KPMG said retail sales fell 3% in April, compared with growth of 7% in April 2025, while food sales fell 2.5% year on year, compared to growth of 8.2% in April 2025. However, this data was skewed by the timing of Easter; Time going on holiday fell in this year’s March figures, but in April 2025.
Helen Dickinson, chief executive of the British Retail Consortium, said: “April’s sales decline was largely driven by the Easter shift, with food hit the hardest. But weak consumer confidence also played a part as fears of conflict in the Middle East driving up living costs kept shoppers reining in… With the World Cup coming, retailers are hoping this will provide a lift and early signs show demand for TVs and sound systems is rising.”
