BREAKING NOW
Apr 3, 2025 4:52 pm
Global Media Network
UK Household Spending Drop Raises Fresh Cost Fears
Households across the United Kingdom cut back on spending in April as fears over rising prices and global tensions grew stronger. New data from Barclays showed the sharpest fall in spending in 18 months. The bank said card spending dropped by 0.1% in April compared with the same month last year. It was the first yearly fall since November 2024. Barclays handles close to 40% of all debit and credit card payments in the UK, making its data an important sign of consumer behavior. The report showed that many people reduced non-essential spending as worries about inflation and energy prices increased. Spending on non-essential items fell by 0.3% during the month. Travel spending saw one of the biggest drops. Spending on travel fell by 5.7% in April after a 3.3% fall in March. Airline spending also dropped by 8.3%. Many families appeared to avoid costly trips and holidays as they tried to save money. Spending in restaurants, pubs, and cafes stayed flat during April. This suggested that many households were becoming more careful with daily expenses. Rising bills and fears of another cost of living crisis have pushed many consumers to reduce extra spending. At the same time, spending on digital entertainment and subscriptions increased by 9.2%. Many people chose to stay home and spend money on streaming and online services instead of going out. Barclays said popular television shows helped drive this rise in digital spending. Essential spending rose slightly by 0.3%. Fuel spending jumped by 10.4%, marking the biggest increase since December 2022. Fuel prices have risen sharply due to tensions in the Middle East and concerns over global oil supplies. The latest figures add to growing concerns about the UK economy. Several recent surveys have shown that both businesses and consumers expect harder financial conditions in the coming months. The Bank of England recently warned that inflation would likely rise further because of the ongoing conflict involving Iran. The bank said higher energy costs could push average household energy bills to around £1,900 by the summer. Food prices are also expected to rise later this year. Analysts believe food costs could increase by as much as 7% before the end of 2026. Higher transport and supply costs are already affecting prices in many stores. A separate consumer survey carried out alongside the Barclays report found that 72% of people believe tensions in the Middle East will affect their living costs throughout 2026. Energy bills, food prices, and inflation were named as the biggest concerns. Consumer confidence also weakened during April. Confidence in non-essential spending fell to 49%, the lowest level since March 2023. However, more than half of those surveyed said they still felt able to manage their day-to-day finances without serious stress. Jack Meaning, chief UK economist at Barclays, said the biggest concern was how long the uncertainty would continue. He warned that if confidence stays weak for too long, both households and businesses may struggle. Another report from the British Retail Consortium and KPMG also showed weaker retail activity in April. Retail sales fell by 3% compared with strong growth during the same period last year. Food sales dropped by 2.5% during the month. Experts noted that the timing of Easter affected some of the figures because holiday shopping happened earlier this year. Helen Dickinson, chief executive of the British Retail Consortium, said weak consumer confidence also played a role in the slowdown. She said many shoppers were worried that the Middle East conflict could make living costs rise again. Retailers now hope that upcoming sporting events, including the FIFA World Cup, may help boost spending later this year. Early demand for televisions and sound systems has already started to rise as consumers prepare for the event.
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