UK consumer spending rose in July, supported by staycations, warm weather, and England’s World Cup performance, according to Barclays data.
The 2% year-on-year increase in card spending surpassed June’s 1.9% gain but remained below the 2.8% CPIH inflation rate. Essential spending grew 2.9%, while discretionary purchases climbed 1.6% as shoppers felt more secure in their jobs and willing to spend on non-essentials.
Retail and hospitality benefit from summer trends
Retail spending grew 2.1%, up from 1.9% in June, with seasonal categories gaining from the heat. Garden center spending increased 4%, clothing rose 2%, and electronics saw a 1.3% lift. One in five consumers bought lighter summer clothing because of the heatwave.
Hospitality and leisure spending rose 2.2%, driven by sports and entertainment events. Bars, pubs, and clubs reported a 7.4% spending increase, with transaction volumes up 10% as fans watched England’s matches. Cinemas saw a 2.6% rise following releases like Toy Story 5 and The Odyssey, while digital content and subscriptions grew 7.7%.
Travel spending fell 0.3% year on year, continuing a five-month decline as consumers chose domestic trips over international ones. Airline spending dropped 6%, and public transport declined 5.4%. Hotels, resorts, and accommodation grew 2.6%, and travel agent spending increased 2.5%, showing holidaymakers still favored UK getaways amid travel uncertainty and pleasant weather.
Consumer confidence improves
Confidence in the UK economy reached 30%, its highest level in 21 months, rising six percentage points. Confidence in the European economy also climbed six points to 35%, the highest since tracking began in 2015.
Job security confidence rose to 47% from 46%, while confidence in spending on non-essentials increased to 53% from 51%. The changes indicate a slight easing of financial caution, though spending growth still trails inflation.
Barclays head of spend insights Rohan Kumar noted the data showed card spending at its highest level in a year. “Multiple factors played a part, with UK staycations, warm weather, and England’s World Cup run boosting travel, hospitality, essentials, and seasonal retail,” he said.
AI adoption rises among consumers
Nearly half of UK adults—48%—used AI for planning or budgeting, up from 35% a year ago. Common applications included product research, budgeting, and holiday planning.
Gen Z adoption was even higher at 78%, a nine-point increase from last year.
