UK households cut back spending at fastest rate in 18 months, Barclays says

"Households cut back on their spending in April at the fastest pace in 18 months, as the conflict in the Middle East provoked fears of another cost of living crisis, a report from one of the UK's biggest banks has suggested. Barclays, which processes nearly 40% of the UK's credit and debit card transactions, said its data showed there had been a 0.1% fall in card spending last month compared with a year earlier. This was the first year-on-year fall since November 2024."

"The bank, which analyses the hundreds of millions of transactions made on its debit and credit cards each month, said non-essential spending fell by 0.3% as consumers cut back on discretionary spending. UK households bracing for new cost of living crisis, report finds Travel spending fell by 5.7% in April, after a 3.3% decrease in March, with airlines down 8.3%, while spending on eating and drinking flatlined in April."

"However, perhaps in a sign that households were choosing to stay in and save money, spending on digital content and subscriptions rose 9.2% in April compared with a year earlier, which Barclays said was helped by the popularity of TV series Euphoria, The Testaments and The Pitt. Essential spending rose by 0.3% as spending on fuel increased 10.4% the greatest rise since December 2022 when Russia's invasion of Ukraine caused a spike in petrol and diesel prices."

"The figures follow a slew of surveys and reports that suggest consumers and businesses are preparing for harder times ahead as the Iran war rattles energy markets and disrupts global supply chains. The Bank of England warned last week that higher inflation in the UK was unavoidable 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."

Households reduced spending in April at the fastest pace in 18 months as fears of another cost of living crisis grew from conflict in the Middle East. Barclays data covering nearly 40% of UK card transactions showed a 0.1% year-on-year fall in card spending, the first decline since November 2024. Non-essential spending dropped 0.3%, while travel spending fell 5.7% after a 3.3% March decrease, with airlines down 8.3%. Spending on eating and drinking was flat. Digital content and subscriptions rose 9.2%, while essential spending increased 0.3% due to fuel spending up 10.4%. Energy and food price pressures were expected to rise further, with many consumers anticipating impacts through 2026.

Read at www.theguardian.com