Barclays has issued an 18-month warning to UK households after data revealed that spending in April fell at the fastest pace in a year and a half. The reduction in outgoings comes amid the ongoing conflict between Israel, the USA, and Iran, which has heightened global uncertainty.
First Year-on-Year Decline Since 2024
Barclays, which processes nearly 40 per cent of all credit and debit card transactions in the UK, reported a 0.1 per cent drop in card spending last month compared with the same period a year earlier. This marks the first year-on-year decline since November 2024. The bank has branches across Birmingham and competes with Santander, HSBC UK, Lloyds, Nationwide, NatWest, TSB, and others.
Consumer Confidence Under Pressure
Jack Meaning, chief UK economist at Barclays, commented: “The key unknown for the UK outlook is how long this uncertainty will last. If confidence remains subdued for too long, and consumers continue to limit their spending as a result, it will be a challenge for households and businesses to weather the storm.”
Helen Dickinson, chief executive of the British Retail Consortium, added: “April’s sales fall was largely driven by the Easter shift, with food hit hardest. But weak consumer confidence also played a role as fears about the Middle East conflict driving up living costs led shoppers to rein in spending. With the World Cup coming, retailers hope it will provide a lift, and early signs show demand for TVs and sound systems picking up.”
Non-Essential Spending and Travel Hit Hard
Barclays noted that non-essential spending fell by 0.3 per cent as consumers cut back on discretionary purchases. Travel spending saw a significant decline, dropping 5.7 per cent in April following a 3.3 per cent decrease in March. Airline spending fell by 8.3 per cent amid concerns over jet fuel shortages and uncertainty about future bookings.
Digital Content and Subscriptions Rise
In contrast to holidays and entertainment, spending on digital content and subscriptions surged by 9.2 per cent in April compared with the same month last year. Essential spending edged up 0.3 per cent, while fuel spending increased by 10.4 per cent, reflecting higher costs at the pump.
The data underscores the cautious mood among UK consumers, with many tightening their belts as geopolitical tensions and rising living costs weigh on household finances.
