Fuel Buying Frenzy Follows Iran War Outbreak as Holiday Bookings Plummet
Britons rushed to purchase fuel at petrol stations in the immediate aftermath of the Iran war, while many are postponing holiday bookings due to the uncertainty caused by the conflict, according to new spending data from Barclays.
Sharp Increase in Fuel Expenditure
Figures from banking giant Barclays showed that spending on fuel jumped by 10.9% in the week after the US-Israel war on Iran first started on February 28. Motorists hurried to fill up their tanks amid concerns over supply and potential price increases as the cost of crude oil surged above 100 US dollars a barrel.
The average price of unleaded petrol has now risen past 150p per litre for the first time in nearly two years, having increased by over 17p since the conflict began, according to the latest RAC data. This significant price hike has contributed to the urgency among drivers to secure fuel.
Supply Concerns and Industry Response
Barclays noted that spending on fuel quickly returned to usual levels after the initial spike. However, there are mounting signs of motorists looking to fill up whenever possible. Asda boss Allan Leighton said on Friday that the chain had experienced "temporary shortages" at some pumps, though he stressed the issues were not nationwide.
Fuel Industry UK, which represents the fuel sector, also stated that the supply of petrol and diesel was "stable". Despite these assurances, the initial rush highlights public anxiety over fuel availability during geopolitical tensions.
Holiday Spending Takes a Hit
The Barclays data revealed that spending on holidays and travel dropped by 7.9% in the week beginning March 14. The bank indicated that consumers are adopting a "wait and see" approach to taking trips due to the ongoing conflict.
Over half of this decline (54%) was attributed to consumers pausing holiday bookings, while the remainder resulted from refunds for cancelled travel plans due to disruption from the war. This shift in consumer behavior underscores the broader economic impact of the Iran war on discretionary spending.
Resilience in Other Spending Areas
Despite the downturn in travel, the lender's figures showed that discretionary spending in other categories, such as eating out and entertainment, has been holding up well so far. This suggests that while consumers are cautious about major expenditures like holidays, they continue to engage in everyday leisure activities.
Expert Commentary on Financial Caution
Vim Maru, chief executive of Barclays UK, commented: "The conflict in the Middle East and concerns about rising costs are understandably leading people to be more cautious, even as many continue with their day-to-day spending. If you're feeling uncertain about your finances, whether that's spending, your mortgage, savings, debts or investments, being proactive with your finances can help. Seeking advice and making use of money management tools will provide reassurance and support."
This advice comes as households navigate the financial uncertainties triggered by the Iran war, balancing immediate needs like fuel with longer-term plans such as holidays.
