Barclays issues important update for British spenders
The bank has issued an alert for debit and credit card holders in light of UK consumer confidence dipping
A major high street bank has issued an important warning for anyone with a credit or debit card. Barclays has released a notice to all debit and credit card holders, highlighting a slowdown in spending in May.
The bank, which competes with NatWest, Nationwide, Lloyds Bank, HSBC UK, TSB, and Santander, reported that consumer card spending rose by a mere 1.0 per cent year-on-year in May.
This is a significant drop from the 4.5 per cent growth observed in April. The growth rate also falls short of the current CPIH inflation rate of 3.5 per cent, reports Birmingham Live.
According to Barclays, consumers are "cutting back" due to dwindling confidence in their personal finances.
The bank's research revealed a three-percentage-point decline in confidence in household finances, down to 67 per cent, and a four-percentage-point drop in the ability to spend on non-essential items, now standing at 56 per cent.
Discretionary spending saw a modest 2.0 per cent increase, a notable decrease from the 5.1 per cent recorded in April, as nearly half (46 per cent) of UK adults expressed intentions to reduce their expenditures.
Barclays' study also highlighted growing concerns in several areas, including 'shrinkflation' (up four percentage points to 82 per cent), 'streamflation', and interest rates (up three percentage points to 64 per cent).
Karen Johnson, Head of Retail at Barclays, gave her thoughts as to why non-essential spending has dipped.
"Consumers are clearly becoming more value-conscious as financial pressures persist, but they're still finding joy in the everyday - whether that's a small treat, a cinema trip, a garden project, or a carefully planned getaway," she said.
The weather is not something Brits might consider when it comes to loosening the purse strings.
But it turns out the elements play a role in our spending, and how much cash we part with at any given time.
Scots enjoyed several scorchers for the majority of last month, with record-breaking sunshine and temperatures.
However, despite no rain for the first 23 days of May, four weeks' worth of rain fell in just three days at the start of June, pushing it into wetter-than-average territory.
"The double bank holidays in May and record sunshine will have given non-essential spending a helpful boost," Johnson noted. "But this was largely outweighed by the rainy weather in the second half of the month.
"Meanwhile, longer-term uncertainty continues to shape how and where people choose to spend."
The Barclays Consumer Spend report amalgamates hundreds of millions of customer transactions with consumer research to offer a comprehensive insight into UK spending.
It comes as Barclays Bank is reducing its number of branches and has closed a significant number in the past few years. Branches throughout the UK, including Scotland, have disappeared, in light of changes in how people bank.
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