British households have cut spending at the fastest rate in 16 months, according to Barclays. consumer spending

Household spending fell at the fastest rate in 16 months in April as conflict in the Middle East sparked fears of another cost-of-living crisis, a report from one of Britain’s largest banks said.

Barclays, which processes nearly 40% of UK credit and debit card transactions, said its data showed card spending fell 0.1% last month compared with the same period last year. This is the first year-on-year decline since November 2024.

The bank, which analyzes hundreds of millions of transactions made with debit and credit cards each month, said non-essential spending fell 0.3% as consumers cut back on discretionary spending.

Travel spending fell 5.7% in April after falling 3.3% in March, airlines fell 8.3%, and food and beverage spending was flat in April.

But perhaps in a sign that households are choosing to stay at home and save money, spending on digital content and subscriptions rose 9.2% in April compared to the previous year, which Barclays said was “driven by the popularity of TV series Euphoria, The Testaments and The Pitt.”

Essential spending also increased by 0.3% as fuel spending increased by 10.4%. This is the largest increase since December 2022, when gasoline and diesel prices surged due to Russia’s invasion of Ukraine.

The figures follow a slew of surveys and reports that suggest consumers and businesses are bracing for more difficult times ahead as the war in Iran shakes energy markets and disrupts global supply chains.

The Bank of England warned last week that a rise in inflation in Britain was “inevitable” as a result of the war with Iran. Typical energy bills are likely to rise by 16% by summer, reaching £1,900, while food prices are likely to rise by 7% by the end of the year.

A survey conducted by Barclays with spending data found that 72% of consumers expect tensions in the Middle East to impact their cost of living throughout 2026, with energy costs, inflation and food prices being the biggest causes of concern.

Confidence in non-essential spending has fallen to 49%, the lowest since March 2023, but 52% feel they can manage their daily finances without too much stress.

Jack Meaning, chief UK economist at Barclays, said: “The key unknown in the UK outlook is how long this uncertainty will persist. If confidence sinks for too long and consumers continue to limit spending as a result, it will be difficult for households and businesses to weather the storm.”

A separate report from the British Retail Consortium and consultancy KPMG said retail sales fell 3% in April compared to a 7% increase in April 2025, and food sales fell 2.5% year-on-year compared to an 8.2% increase in April 2025. However, this data is skewed by the timing of Easter, with figures for March this year corresponding to April 2025.

Helen Dickinson, chief executive of the British Retail Consortium, said: “The decline in sales in April was largely due to the worst food hit at Easter. However, a drop in consumer confidence has also had an impact as fears of conflict in the Middle East have deterred shoppers as rising costs of living rise. With the World Cup approaching, retailers are hoping this can provide a boost and early signs are that demand for TVs and sound systems is recovering. “It shows,” he said.

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