Barclays Report Shows UK Households Cutting Spending at Fastest Pace in 18 Months
A Barclays analysis released on May 11 indicates that UK households reduced their credit‑card spending by 6.2% in April, the steepest decline since November 2024. The slowdown was most pronounced in travel and hospitality categories, reflecting consumer anxiety over the ongoing conflict in the Middle East.
The report comes amid fears that a resurgence of hostilities between Iran and Israel could trigger a new cost‑of‑living crisis, reminiscent of the pandemic‑era shocks. Economists note that rising energy prices and inflation have already strained household budgets, and geopolitical instability adds another layer of uncertainty.
Barclays, which processes roughly 40% of UK card transactions, highlighted that the fall in discretionary spending coincides with a 3.4% year‑on‑year increase in mortgage repayments. Reuters cited the same data, while the Guardian emphasized that “Britons are preparing for harder times amid Iran war fallout.” The bank’s chief economist, Sarah Whitfield, warned that continued pressure could push the economy toward recession.
Financial analysts suggest that the trend may prompt policymakers to accelerate fiscal support measures, such as targeted tax relief or temporary subsidies for energy bills. Dr. Richard Owens of the London School of Economics noted, “If consumer confidence remains low, the knock‑on effects on retail and services could be severe.”
Barclays plans to update its consumer‑spending outlook in a quarterly briefing later this summer, while the Treasury is expected to announce a review of economic measures in response to the evolving geopolitical situation. Market observers will monitor whether additional stimulus can stabilise household finances.