Consumer card spending in the UK increased by 1.4 per cent year-on-year in July, according to new data from Barclays. This follows a small decline of -0.1 per cent in June but remains below the latest CPIH inflation rate of 4.1 per cent. The figures are based on Barclays’ analysis of hundreds of millions of customer transactions combined with consumer research.
Essential spending dropped by -0.7 per cent, while discretionary spending grew by 2.4 per cent, up from 0.8 per cent in June. Retail overall saw a positive month with a rise of 1.9 per cent, supported mainly by clothing sales which rose 4.2 per cent—the strongest increase since September 2024.
The report highlights that nearly one in five adults purchased more summer clothes and accessories in July, and over a quarter said the changeable weather influenced their spending decisions. Online retail spending (excluding groceries) increased by 4.9 per cent compared to June’s 2.4 per cent growth, as shoppers took advantage of discounts and began early Christmas shopping.
Pharmacy, health and beauty sales were up 9.8 per cent, reflecting continued demand for affordable luxuries after COVID-19 restrictions—a phenomenon sometimes called the “lipstick effect.” Furniture store sales also rose for the eighth consecutive month with a gain of 6.7 per cent.
Despite a dip in confidence regarding the UK economy—down three points to 22 per cent—confidence in household finances remained steady at 72 per cent, slightly down from June but seven percentage points higher than last year’s figure for July.
Barclays’ survey found that budgeting is an ongoing priority: about one third are building savings buffers and over seventy percent have made financial adjustments due to economic conditions.
Artificial intelligence tools are increasingly used for money management among consumers; more than a third have turned to platforms like ChatGPT or Gemini for planning and budgeting tasks, with this figure rising to nearly seventy percent among Gen Z respondents.
Among all age groups using AI tools for financial purposes, common activities include comparing prices and deals (12%), researching products (11%), creating budgets (10%), setting financial goals (10%), meal planning (9%), tracking spending habits (7%) and planning holiday budgets (7%).
Entertainment spending was up by 7.4 per cent during July; live shows and concerts climbed by 9.3 per cent, peaking when tickets for Lewis Capaldi’s tour went on sale on July 10th. Cinema spend rose following new film releases such as "Jurassic World Rebirth," while digital content subscriptions also benefited from streaming releases like "Lilo & Stitch" and "Happy Gilmore 2."
Karen Johnson, Head of Retail at Barclays said: “The summer sales, changeable weather and shoppers seeking the ‘feel-good factor’ led to a strong July for retailers, particularly among beauty, clothing and furniture stores. While confidence in the UK economy remains subdued, prudent money management, supported by the growing popularity of AI tools to help with budgeting is contributing to a continued resilience in personal and household finances”.
Will Hobbs, Managing Director at Barclays Private Bank and Wealth Management commented: “Despite what public debate might suggest, there are a number of reasons to be positive about the current performance of the UK economy. Real (inflation adjusted) household incomes continue to grow, while the consumer’s balance sheet remains in good order in aggregate. July admittedly only saw marginal spend growth, but the trend is healthier.
“Confidence is the key to unlocking the UK’s still restrained spending power. While this is clearly a difficult factor to forecast, longer history suggests a bias towards optimism is well supported. Doom sells, but the outlook for the UK has more going for it than widely realised, with a revitalised Europe particularly important given the role of proximity in economic growth.”
Barclays notes that its insights cover nearly forty percent of credit and debit card transactions across its issuing business between late June and late July each year; these findings reflect actual transaction data alongside representative consumer surveys carried out online.
In June this year Barclays published its '10 years of Spend' report analysing trends dating back to 2015 through transaction data and consumer sentiment studies.
Barclays describes itself as aiming to be “the UK-centred leader in global finance,” operating five main divisions spanning consumer banking through investment services both domestically and internationally via its website https://home.barclays/.
For businesses seeking further understanding into market position or customer behaviour based on real-world spend patterns—and those interested can contact Barclays Market & Customer Insights at contact-MCI@barclays.com.