UK consumer spending falls for first time since 2024 as Iran war bites
UK consumer spending fell 0.1% in April, the first annual decline since late 2024, as Iran war fears drove households toward savings and away from big-ticket and travel spending, Barclays and BRC data showed.
Summary:
- Barclays credit and debit card spending fell 0.1% year-on-year in April, reversing a 0.9% gain in March, the first decline since November 2024
- BRC total retail sales dropped 3.0% year-on-year in April, against a 3.6% rise in March; like-for-like sales fell 3.4%, reversing a 3.1% gain in March
- Both surveys flagged steep falls in big-ticket and travel-related spending, with Barclays reporting a 5.7% annual decline in card spending on travel
- Barclays chief UK economist Jack Meaning attributed the shift to consumers building savings buffers in response to the Middle East shock and falling confidence
- BRC chief executive Helen Dickinson cited weak readings in sectors such as furniture, linking the pullback to fears that the conflict would push up living costs
- The BRC noted that combining March and April to adjust for Easter timing differences, retail sales were still up 1.5% on the year
British consumers cut their spending in April for the first time since November 2024, according to data from Barclays and the British Retail Consortium, as anxiety over the economic fallout from the Iran war prompted households to pull back from discretionary purchases and redirect money into savings.
Barclays reported that spending on its credit and debit cards fell 0.1% in annual terms last month, a sharp reversal from the 0.9% increase recorded in March. The BRC's retail sales monitor told a similar story, with total sales down 3.0% year-on-year in April against a 3.6% rise the previous month. On a like-for-like basis, BRC sales fell 3.4% compared with a 3.1% gain in March. The BRC noted that the Easter timing difference between this year and last distorts the monthly comparisons, and that combining March and April produces a more moderate picture, with sales up 1.5% on the year. Even so, both surveys pointed to a consumer that is becoming noticeably more cautious.
The retreat was sharpest in big-ticket and travel-related categories. Barclays recorded a 5.7% annual fall in card spending on travel, while both surveys flagged weakness in furniture and other high-value discretionary goods. Hotels also saw heavy declines in Barclays data.
Jack Meaning, Barclays' chief UK economist, said the April readings reflected consumers adapting directly to the Middle East shock, with households choosing to build savings buffers rather than maintain pre-war spending patterns. He noted that confidence is falling in response to uncertainty both domestically and internationally, and warned that if subdued sentiment persists and consumers continue to limit spending, it will present a sustained challenge for both households and businesses.
Helen Dickinson, chief executive of the BRC, echoed that assessment, pointing to fears that the conflict would drive up living costs as a key factor behind the pullback in sectors such as furniture.
The data add to a broader picture of faltering UK consumer morale, and will increase pressure on policymakers to assess how durable the demand slowdown proves to be if the conflict and its inflationary effects are prolonged.
ps, Eyes on UK politics at present with PM Starmer under pressure to resign. BBC has more.
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A simultaneous contraction in both Barclays card spending and BRC retail sales in April points to a meaningful deterioration in UK domestic demand that will sharpen expectations for Bank of England easing. Sterling may come under modest pressure as the data reinforces a stagflationary read: energy-driven inflation eroding real incomes while consumer activity contracts. The sharp fall in travel spending, down 5.7% annually on Barclays data, has direct implications for airlines and hospitality operators with UK exposure, and the pivot toward savings over discretionary spending suggests the demand hit could persist beyond a single month if Middle East uncertainty continues.
This article was written by Eamonn Sheridan at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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