British households reduced their spending in April at the fastest pace in 18 months, as the conflict in the Middle East stoked fears of another cost of living crisis, according to a report from Barclays, one of the UK’s largest banks.
Sharp Decline in Card Spending
Barclays, which processes nearly 40% of the UK’s credit and debit card transactions, reported a 0.1% fall in card spending last month compared with a year earlier. This marked the first year-on-year decline since November 2024. The bank, which analyses hundreds of millions of monthly transactions on its cards, noted that non-essential spending dropped by 0.3% as consumers tightened their belts on discretionary purchases.
Travel and Dining Hit Hard
Travel spending fell by 5.7% in April, following a 3.3% decrease in March. Airline spending plummeted by 8.3%, while expenditure on eating and drinking remained flat. However, spending on digital content and subscriptions surged by 9.2% year-on-year, buoyed by popular TV series such as Euphoria, The Testaments, and The Pitt, suggesting households opted to stay in and save money.
Essential spending edged up by 0.3%, driven largely by a 10.4% increase in fuel costs—the largest rise since December 2022, when Russia’s invasion of Ukraine sent petrol and diesel prices soaring.
Economic Uncertainty Looms
The figures align with a series of surveys and reports indicating that both consumers and businesses are bracing for tougher 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” due to the conflict, with typical energy bills likely to rise by 16% to £1,900 by summer and food prices expected to increase by 7% by year-end.
A Barclays survey accompanying the spending data found that 72% of consumers anticipate the Middle East tensions will impact their cost of living throughout 2026, with energy bills, inflation, and food prices being the top concerns. Confidence in non-essential spending dropped to 49%, its lowest level since March 2023, though 52% of respondents said they can manage day-to-day finances without significant stress.
Jack Meaning, chief UK economist at Barclays, commented: “The key unknown for the UK outlook is how long this uncertainty will last. If confidence remains subdued for too long, and consumers continue to limit their spending, it will be a challenge for households and businesses to weather the storm.”
Retail Sales Also Falter
A separate report from the British Retail Consortium (BRC) and consultancy KPMG showed retail sales fell by 3% in April, compared with growth of 7% in April 2025. Food sales dropped 2.5% year-on-year, against an 8.2% increase in the same month last year. However, these figures were skewed by the timing of Easter, with the pre-holiday period falling in March this year but in April last year.
Helen Dickinson, chief executive of the BRC, said: “April’s sales fall was largely driven by the Easter shift, with food hit hardest. But weak consumer confidence also played a role, as fears about the Middle East conflict driving up living costs led shoppers to rein in spending. With the World Cup coming, retailers hope it will provide a lift, and early signs show demand for TVs and sound systems picking up.”
