Barclays has issued an 18-month warning to UK households after data revealed the sharpest decline in consumer spending in 18 months. In April, UK households reduced their expenditure at a pace not seen since November 2024, signaling growing economic caution.
This drop comes amid heightened global tensions linked to the conflict involving Israel, the USA, and Iran, adding to the uncertainty affecting consumer confidence. Barclays, which operates branches across the UK including Birmingham and handles nearly 40% of the nation’s credit and debit card transactions, revealed a 0.1% decline in card spending compared to the same period last year—the first year-on-year fall in almost two years.
Jack Meaning, Barclays’ Chief UK Economist, commented on the outlook: “The key unknown for the UK economy is the duration of this uncertainty. Prolonged subdued confidence and continued spending restraint could pose significant challenges for both households and businesses.”
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Helen Dickinson, Chief Executive of the British Retail Consortium, noted that April’s sales drop was partly due to the timing of Easter, with food sector sales hit hardest. She added that fears around the Middle East conflict and its impact on living costs also contributed to weakened consumer confidence. However, retailers remain hopeful that the upcoming World Cup will boost demand, with early signs already showing increased interest in TVs and sound systems.
Barclays’ data highlights a 0.3% decline in non-essential spending as consumers tighten their discretionary budgets. Travel spending fell sharply by 5.7% in April, following a 3.3% decrease in March, with airlines seeing an 8.3% drop amid jet fuel supply concerns and uncertain bookings.
Conversely, spending on digital content and subscriptions increased by 9.2% compared to last year, reflecting changing consumer habits. Essential spending showed a modest rise of 0.3%, with fuel costs up by 10.4%, indicating consumers are prioritizing necessities despite economic pressures.