Barclays has issued a cautionary update for customers planning summer holidays, highlighting a notable decline in travel spending across the UK. For the first time in five years, consumer expenditure on travel has fallen, reflecting growing concerns over the cost of living and the broader economic impact of the conflict in the Middle East.
According to Barclays, overall consumer card spending saw a modest year-on-year increase of 0.9% in March, slightly down from February’s 1%. However, spending on travel dropped by 3.3% last month, marking the first decrease since March 2021. This shift indicates that many consumers are prioritizing essential expenses and delaying major purchases.
Jack Meaning, Chief UK Economist at Barclays, explained: “Shoppers are building up savings and holding back on large expenses in response to the ongoing geopolitical shock. This trend points to subdued economic activity in the near term.” He also noted the Bank of England’s upcoming interest rate decision, saying: “Our models suggest holding rates steady to manage inflation without overburdening consumers.”
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Despite these challenges, a majority of UK adults remain confident in their personal finances, with 67% feeling secure about their household budgets and 71% confident they can live within their means. Yet, optimism about the wider UK and global economies has declined, with only 21% expressing confidence—a drop from previous months.
Karen Johnson, Head of Retail at Barclays, observed: “While cost of living concerns temper consumer sentiment, spending remains strong in categories like clothing, entertainment, and digital subscriptions. Many are carefully balancing their budgets, prioritizing what matters most while navigating economic uncertainty.”