Consumer spending in the UK declined in October as confidence in both personal finances and the wider economy weakened ahead of the Autumn Budget, according to Barclays’ latest Consumer Spend report. The report, which draws on hundreds of millions of customer transactions and consumer research, found that all seven measures of consumer and economic confidence tracked by Barclays fell for the first time since August 2022.
Consumer card spending dropped by 0.8% year-on-year in October, a slight decrease from September’s figure and significantly below the most recent CPIH inflation rate of 4.1%. Essential spending was down for the sixth consecutive month at -2.5%, while discretionary spending remained flat at 0.1%. The anticipation of the Autumn Budget, upcoming Black Friday deals, and milder weather were cited as reasons for consumers delaying purchases or reducing their outlay across several categories.
Barclays reported that confidence in household finances saw the largest decline among all measures, falling from 74% to 63%. Confidence in job security and willingness to spend on non-essential items also reached their lowest levels since 2023, at 44% and 51% respectively.
The survey revealed that two out of five consumers are adjusting their finances ahead of the Budget announcement; among them, over a third are cutting back on spending or postponing discretionary purchases, while nearly a third are building up savings buffers. One third overall said they are holding off on major financial decisions until after the Budget is announced—a figure rising to 44% among Gen Z respondents.
Concerns about household finances were mainly attributed to cost-of-living pressures (54%), pessimism about future prospects (41%), and inflation outpacing wage growth (30%). Those who expressed confidence cited low or no debt (58%), careful budget management (50%), and having a savings buffer (43%) as key factors.
In retail, spending recorded its steepest fall (-0.5%) since November last year. Department stores (-7.8%) and discount retailers (-7.6%) experienced notable declines, while clothing sales remained flat. Milder autumn weather led shoppers to delay seasonal purchases; meanwhile, more than a quarter reported saving money specifically for Black Friday or Christmas sales periods.
Despite these trends, some sectors showed resilience: health & beauty saw growth of 7.6%, with younger consumers particularly focused on wellbeing; furniture stores posted an eleventh consecutive month of growth (+5.3%), and garden centre spending rose by 7.6%.
Festive food products have not escaped scrutiny from shoppers: two-thirds noticed ‘shrinkflation’—products getting smaller but costing as much or more—and over half believed chocolate products had declined in quality due to ‘skimpflation’, where ingredient quality drops without price reductions.
The hospitality & leisure sector grew modestly by 1.2%, driven by entertainment (+4.7%) and travel agents (+7.2%). Golf clubs stood out with a rise of over 21%, following Team Europe’s Ryder Cup win.
Julien Lafargue, Chief Market Strategist at Barclays Private Bank and Wealth Management, commented: “Consumers and businesses alike appear to have adopted a ‘wait and see’ approach ahead of the Autumn Budget. While this is generating some short-term headwinds, it could position the UK economy for a rebound once the uncertainty lifts, potentially setting the stage for a strong festive season.”
Karen Johnson, Head of Retail at Barclays added: “Looking ahead to the Autumn Budget, consumers are taking a considered approach to spending. While confidence declined in October, we’re seeing resilience within categories linked to health and wellbeing, suggesting people are still willing to invest in the areas that matter most to them. With Black Friday and Christmas on the horizon, we expect spending patterns to shift again as shoppers seek out value and seasonal offers.”
Barclays processes nearly 40% of credit and debit card transactions nationwide through its issuing and acquiring businesses—giving it significant insight into UK consumer behaviour over time.