UK households cut back spending at fastest rate in 16 months, Barclays says

UK households cut spending in April at the fastest rate in 16 months, as fears of a renewed cost-of-living crisis spurred by Middle East tensions led consumers to pull back on non-essential purchases [1]. Data from Barclays, which processes nearly 40% of the UK's card transactions, showed a 0.1% year-on-year fall in overall card spending in April, the first annual decline since November 2024 [1]. Non-essential spending fell by 0.3%, with travel spending down 5.7% and airline spending dropping 8.3% [1]. In contrast, essential spending rose 0.3%, driven by a 10.4% surge in fuel costs—the largest increase since December 2022 [1]. Spending on digital content and subscriptions rose 9.2%, which Barclays linked to popular TV series [1]. A Barclays survey found 72% of consumers expect Middle East tensions to impact their cost of living throughout 2026 [1]. The Bank of England has warned higher inflation is 'unavoidable,' projecting a 16% rise in typical energy bills by summer and a 7% increase in food prices by year's end [1]. Jack Meaning, chief UK economist at Barclays, stated, 'The key unknown for the UK outlook is how long this uncertainty will last' [1]. Separate data from the British Retail Consortium and KPMG showed retail sales fell 3% in April, though the timing of Easter skewed the comparison [1]. Helen Dickinson, CEO of the BRC, noted weak consumer confidence played a role as fears about the conflict led shoppers to 'rein in' spending [1].