Barclays Bank has issued a stark warning regarding the state of UK consumer confidence, revealing that card spending in the crucial final weeks of 2025 ended with a "whimper". The bank's latest data shows households are continuing to tighten their belts in the face of persistent cost pressures.
A Sustained Drop in Essential and Non-Essential Spending
The bank's Consumer Spend report, which analyses hundreds of millions of customer transactions, found that essential spending declined for the eighth consecutive month in December. Perhaps more strikingly, non-essential spending recorded its most significant fall since February 2021.
Barclays attributes this sustained downturn to the fact that "consumers continue to combat rising costs by making and planning cutbacks." This cautious behaviour comes despite some early signs of recovering confidence.
Expert Insight: A Focus on Value and Wellbeing in 2026
Karen Johnson, Head of Retail at Barclays, provided analysis on the shifting consumer mindset. "Despite there being encouraging signs that consumer confidence is recovering, shoppers will undoubtedly pay increasing attention to value for money in 2026," she said, predicting a rise in the use of loyalty schemes and budget supermarkets.
Johnson also highlighted a New Year trend: "Meanwhile the New Year has brought with it a renewed focus on both financial and physical wellbeing, which will result in more considered and conscientious spending. Wellness, beauty and fitness will all benefit from this shift in priorities in 2026 and beyond."
Economic Outlook: Hope for Relief on the Horizon
Jack Meaning, Chief UK Economist at Barclays, commented on the broader economic picture. “These numbers suggest 2025 ended with a whimper, following the slowdown we saw define last year," he stated.
However, he offered a more optimistic forecast for the coming months: “We expect inflation to ease significantly in the first half of 2026, which, alongside a further easing of interest rates, should provide consumers with respite, unlocking real spending power. If the tentative signs of improving confidence can last beyond the New Year, then UK activity could strengthen as the year goes on.”
Key Findings from the Barclays Report
The report also uncovered several specific trends from December and plans for the year ahead:
- Pubs enjoyed a modest festive boost, with spending increasing by 1.9% after three months of decline. The busiest day for pubs in December was the 13th.
- In a sign of ongoing financial caution, over half of all UK adults plan to reduce their spending on food and discretionary items in 2026 due to ongoing inflation concerns.
The data paints a clear picture of a nation carefully managing its finances, with hopes pinned on economic conditions improving as 2026 progresses.
