Barclays has reported encouraging news for those using credit and debit cards, indicating an improvement in household financial confidence. The bank, which operates branches in Birmingham, revealed that card spending increased by 2.1 per cent in August, marking the highest growth seen in the past 13 months.
This rise was consistent across both essential and non-essential categories, each experiencing 2.1 per cent growth. Barclays' competitors include major banks such as Santander, HSBC UK, NatWest, and Nationwide.
Notably, several sectors within hospitality and leisure demonstrated strong performance. Entertainment spending surged by 5.9 per cent, aided by the popularity of summer blockbuster films driving cinema attendance.
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The travel sector also saw a resurgence, with spending growing by 3.1 per cent after five consecutive months of decline. Despite this uplift, a significant majority of consumers expressed concerns about pricing practices: 72 per cent worried about ‘drip pricing’-additional fees added at checkout-and 71 per cent were wary of ‘dynamic pricing,’ where prices fluctuate based on demand.
Broader inflationary pressures remain a concern, with 84 per cent of respondents troubled by rising prices. Specific worries included ‘shrinkflation’-the reduction in product sizes (77 per cent)-and ‘skimpflation’-the decline in product quality (76 per cent).
Rohan Kumar, Head of Spend Insights at Barclays, commented: “Card spending continued to build momentum in August, reaching a 13 month-high, while consumer confidence in their own finances showed signs of recovery. Growth in discretionary purchases and strong performances across travel, eating and drinking, and entertainment all contributed to a boost for hospitality and leisure, suggesting many finished summer by prioritising holidays, social occasions and memorable experiences, even as price and value concerns stayed firmly front of mind.”
Jack Meaning, Chief UK Economist at Barclays, added: “Consumer spending and confidence remained resilient in August, even as pressures from the Middle East began to filter into prices. This positive news suggests consumers should be able to weather the bout of narrowly focussed, temporary inflation we think is coming down the track. However this week has shown risk remains. If the situation in the Middle East persists or intensifies in the coming months, squeezed households may need to be even more discerning with their spend.”