UK households cut back spending at fastest rate in 18 months, Barclays says
Summary
UK households spent less in April, with the biggest year-on-year drop in 18 months, as worries about the conflict in the Middle East raised fears of higher living costs. Spending on non-essential items and travel fell, while essential spending rose, especially on fuel.Key Facts
- Barclays data shows UK card spending fell 0.1% in April compared to a year earlier, the first drop since November 2024.
- Non-essential spending dropped 0.3%, and travel spending fell 5.7% in April. Airline spending declined by 8.3%.
- Spending on digital content and subscriptions increased 9.2%, possibly due to popular TV shows like *Euphoria* and *The Testaments*.
- Essential spending rose 0.3%, with fuel costs up 10.4%, the largest increase since December 2022.
- The Bank of England expects energy bills to rise 16% and food prices to increase 7% by the end of the year due to the Iran war's impact.
- A Barclays survey found 72% of people believe the Middle East conflict will affect their living costs through 2026.
- Confidence in non-essential spending dropped to its lowest since March 2023, at 49%.
- Retail sales fell 3% in April, with food sales down 2.5%, partly influenced by the timing of Easter.
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