UK consumers’ debit and credit card spending slumped in 2025 for the first time since the Covid-19 pandemic as wider economic nerves knocked confidence.
Card spending fell 0.2 per cent in the last 12 months, according to Barclays, a sharp contrast to the 1.6 per cent growth recorded in 2024.
Just a quarter of British adults said they felt confident about the state of the UK economy last year.
Whilst confidence in household finances was much higher at 64 per cent, it still tumbled from 70 per cent in January.
“People might be feeling a bit more optimistic about their own financial situations but they’re nervous about the economy generally, and social media is chock full of posts about ways to boost savings despite falling interest rates,” said AJ Bell head of financial analysis Danni Hewson.
UK consumer confidence falls
Consumer confidence plunged to a new low ahead of Chancellor Rachel Reeves’ second Autumn Budget as Brits prepared themselves for a hefty tax raid.
The Barclays data also showed that essential spending fell by 2.3 per cent, whilst non-essential expenditure grew by 0.8 per cent, with shoppers prioritising “joy-bringing” experiences over basic goods.
There was also a significant surge in the “Experience Economy,” with the entertainment category growing by 4.3 per cent after the reunion of Oasis, which alone was projected to power £1bn in economic activity and major tours by artists such as Coldplay.
“Since the pandemic, priorities have changed. Wellness has become vital, and both men and women take their skin care seriously,” Hewson said.
“Moments that make memories and can be shared with friends or bragged about online have had more appeal than ‘stuff’, although travel has taken a back seat to tickets for massive music tours.”
Boxing Day bounce could boost spending
Barclays data showed Brits were more cautious in buying expensive imports after President Donald Trump’s ‘Liberation Day’ onslaught in April, when the White House slapped sweeping tariffs across trading partners.
Over 70 per cent said they would buy more British-made products, with 12 per cent willing to pay a premium to support local businesses.
Retailers in the UK enjoyed a boost in footfall on Boxing Day, with analysis from MRI Software showing shopper footfall increased 4.4 per cent year-on-year.
The analysts said the retail sector may end the year on a “positive note” after the Boxing Day bounce.
Hewson said: “A late surge in revellers hitting the high street on Boxing Day might have boosted footfall, but the real proof will be found in retailers’ Christmas earnings updates.”