LONDON: UK shoppers’ spending on their debit and credit cards dropped in 2025 for the first time since the pandemic, according to Barclays data that nevertheless showed people still willing to treat themselves with small luxuries and experiences.
The bank said the value of card spending fell 0.2% compared with 2024, a sharp slowdown from last year’s 1.6% growth.
It was the first drop since 2020 when it plunged 7.1% due to Covid lockdowns.
The Barclays data confirmed a weakening in household spending at a time when confidence has been suppressed by a fresh spike in inflation, rising unemployment and political uncertainty.
Last week official figures showed that real disposable incomes fell 0.8% in the third quarter and have not grown since the end of 2024.
Subdued consumption and high levels of savings have been a major drag on the UK economy’s growth rate.
A recovery in spending is seen as vital to achieving even the modest growth the budget watchdog has predicted over the coming years.
Barclays said Britons still splashed out on small luxuries and the so-called “experience economy,” with huge tours for music artists including Oasis, Coldplay and Sabrina Carpenter.
Spending in the pharmacy, health and beauty category was strongest, growing 9.5%.
That was evidence of a so-called “lipstick effect,” where consumers buy smaller affordable luxuries to boost their mood at times of financial pressure, the bank said.
Spending on essentials slipped 2.3% year-on-year, including a 1.7% drop in supermarkets.
The value of non-essential spending grew by a tepid 0.8%. — Bloomberg
