May 12 (Reuters) – British consumers, shaken by the widening economic fallout from the Iran war, cut their spending last month for the first time since November 2024 as they focused on essentials rather than leisure, a survey showed on Tuesday.
Barclays said spending on its credit and debt cards fell by 0.1% in annual terms in April after a 0.9% increase in March. Its survey showed heavy declines in spending on hotels and travel.
A separate survey of retailers from the British Retail Consortium showed a sharp drop in store spending last month, albeit distorted by the timing of the Easter holidays.
Both surveys showed a reduction in spending on big-ticket items as households adopted a cautious financial stance. The readings chimed with other gauges of the consumer economy that show faltering morale.
“This data shows consumers are already adapting in response to the shock from the Middle East, for instance, by building up a savings buffer,” said Barclays chief UK economist Jack Meaning.
“With uncertainty high both at home and abroad, it is unsurprising to see confidence falling.”
The BRC said retail sales fell by 3.0% in annual terms in April, after a 3.6% rise in March. Taking March and April together – to account for the different timings of Easter this year and last year – retail sales were up 1.5% on the year.
“But weak consumer confidence also played a role as fears about the Middle East conflict driving up living costs led shoppers to rein in,” said BRC chief executive Helen Dickinson, citing weak readings for sectors like furniture.
Barclays said card spending on travel dropped by 5.7% in annual terms.
“The key unknown for the UK outlook is how long this uncertainty will last,” Meaning said.
“If confidence remains subdued for too long, and consumers continue to limit their spending as a result, it will be a challenge for households and businesses to weather the storm.”
(Reporting by Andy Bruce; editing by Suban Abdulla)
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