Barclays: Card Spending Grew 2.1% in August

• Consumers’ confidence in their household finances, ability to live within their means, and spend on non-essentials all improved in August
• ·Growth in card spending reached a 13 month-high, with both essential and non-essential spending growing 2.1 per cent
• Multiple hospitality & leisure categories recorded strong performances, including entertainment, up 5.9 per cent, with summer blockbusters boosting cinemas
• Travel spending rebounded, growing 3.1 per cent after five consecutive months of decline
• The Barclays Consumer Spend report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending

Card spending grew by 2.1 per cent year-on-year in August, building on July’s 2.0 per cent increase, but remaining below the latest CPIH inflation rate of 3.1 per cent. Both essential and non-essential spending increased 2.1 per cent, helped by improving consumer confidence and the strong performance of hospitality & leisure.

Consumers’ confidence in their household finances reached its highest level in six months, at 66 per cent in August, up from 64 per cent in July. Consumers also reported feeling more confident in their ability to live within their means (71 per cent, up from 69 per cent) and spend on non-essentials (54 per cent, up from 53 per cent).

Meanwhile, confidence in the UK economy fell four percentage points to 26 per cent, down from July’s 21-month high of 30 per cent, but remained above the 2026 average of 24 per cent. Similarly, confidence in the European and global economies returned to June’s levels of 29 per cent and 26 per cent respectively, after spiking to 35 per cent and 27 per cent in July.

Cost and quality-conscious consumers

Despite growing confidence in their personal finances, the vast majority of consumers remain cost-conscious; seven in 10 say they are concerned about the impact of ‘drip pricing’ (added fees at checkout – 72 per cent) and ‘dynamic pricing’ (prices rising and falling in line with demand – 71 per cent) on their household finances.

More than eight in 10 (84 per cent) say they are concerned about rising prices, with three in four citing ‘shrinkflation’ (declining product size – 77 per cent) and ‘skimpflation’ (declining product quality – 76 per cent) as specific concerns. Chocolate and sweets are the most common items consumers have noticed declining in quality (46 per cent), followed by crisps (31 per cent), dairy products (24 per cent) and bread/bakery products (21 per cent). Shoppers are also considering the impact of recent heatwaves on the price and availability of certain foods, particularly vegetables, fruit and dairy products.

Entertainment excels and travel makes a comeback

Growth in travel spending reached 3.1 per cent in August, its highest level year-to-date and a marked improvement after five consecutive months of decline. Within the category, airline spend grew for the first time since August 2025, up 3.5 per cent and travel agents saw a 4.4 per cent boost. Separately, hotels, resorts and accommodation grew 3.5 per cent, which comes as more holidaymakers are opting for UK staycations over trips abroad in 2026, at 36 per cent in comparison to 33 per cent. Meanwhile 14 per cent overall are actively looking for travel discounts, offers, and last-minute deals.

Travel’s strong performance contributed to a 3.3 per cent boost for hospitality and leisure. Entertainment also emerged as one of the month’s big winners, up 5.9 per cent, led by cinemas and bowling alleys, as many sought out air-conditioning and ventured out to see major summer blockbusters, such as The Odyssey and Spider-Man: Brand New Day. Eating and drinking grew 1.8 per cent, with both pubs, bars and clubs (2.7 per cent) and restaurants, cafes and bakeries (1.5 per cent) in growth. Meanwhile, retail spending increased 1.2 per cent, with electronics (2.0 per cent) and clothing (0.9 per cent) contributing to growth amid sustained warmer weather in August.

Autumn’s welcome arrival

After the UK’s hottest summer on record, two in five UK adults (41 per cent) say they are ready for the season to be over. Almost half (46 per cent) say they have enjoyed this summer less because of the heatwaves, and 53 per cent are ready for cooler autumn weather. Beyond temperatures, half (48 per cent) are looking forward to autumnal activities, 41 per cent are eager to wear autumn clothing and 35 per cent are doing a ‘September reset’, or treating the arrival of September like a second New Year, and a chance to get organised, set goals, and get back into a routine.

Rohan Kumar, Head of Spend Insights at Barclays, said: “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, said: “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.”

Overall growth figures

Source : Barclays

Image : William Barton / shutterstock / 1159330753

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