Consumer card spending in the UK rose by 4.5% in April, marking the highest increase since June 2023. This growth surpassed the Consumer Prices Index including owner occupiers' housing costs (CPIH) inflation rate of 3.4%. The rise was attributed to the Easter weekend and favorable weather conditions which boosted retail and hospitality sectors. Essential spending also returned to growth after two months of decline, increasing by 3.1%.
Research conducted in late April indicated that a majority of UK consumers (72%) remain concerned about tariffs affecting household finances, though this is an improvement from earlier in the month when it was at 77%. Over a quarter of consumers are attempting to save more each month as a precaution against potential price increases.
Despite uncertainties around tariffs, consumer confidence in household finances remains steady at 70%, with most feeling capable of living within their means. Non-essential spending saw a significant rise of 5.1% year-on-year, indicating robust consumer sentiment.
There is a notable shift towards purchasing British-made products, with seven out of ten shoppers preferring local goods and one in eight willing to pay extra for them. The demand for locally-produced food has been strong, with fruit and vegetables being particularly popular among consumers.
The positive economic sentiment has been supported by various factors including reduced interest rates by the Bank of England and a recent trade agreement between the US and UK. "While the long-term impact of any tariffs on household finances remains to be seen... shoppers are demonstrating a commitment to supporting British business," said Karen Johnson, Head of Retail at Barclays.
Julien Lafargue from Barclays Private Bank noted that "UK economic sentiment has been surprisingly positive recently" despite global trade uncertainties.
Retail spending increased overall by 6.8%, driven by a rise in transactions across all subcategories for the first time since tracking began in 2019. Garden centers experienced record growth, while supermarkets saw their first increase since January.
The hospitality sector also benefited from improved weather conditions and social activities during Easter, with spending up by 6.7%.
Cost-cutting measures continue among consumers who seek better value from their purchases. Many have observed supermarkets reducing prices or offering promotions to match competitors’ offers.
Barclays’ report provides insights into these trends through extensive data analysis based on millions of customer transactions combined with consumer research.