Consumer confidence hit 21 month high in July

Consumer confidence in the UK reached its highest level in 21 months in July, according to Barclays’ survey. About 30% of respondents expressed optimism about the economy, a 6% increase from June. Consumer card spending was up 2per cent, with discretionary spending also up 1.6 per cent.

The new data follows a 1.9 per cent increase in June, but remained below the latest CPIH inflation rate of 2.8 per cent. Essential spending grew 2.9 per cent, and non-essential spending increased 1.6 per cent, with England’s run at the World Cup, the July heatwave and recovering consumer confidence all contributing to the uplift.

Card spending grew by 2.0 per cent year-on-year in July, following a 1.9 per cent increase in June, but remained below the latest CPIH inflation rate of 2.8 per cent. Essential spending grew 2.9 per cent and non-essential spending increased 1.6 per cent, with England’s run at the World Cup, the July heatwave and recovering consumer confidence all contributing to the uplift.

Confidence in the strength of the UK economy reached 30 per cent in July – representing a 21-month high and a six-percentage point improvement on June. Confidence in the European economy also climbed six points to 35 per cent – the highest level recorded since Barclays started tracking this measure in 2015.

Consumers reported feeling more confident in both their job security and ability to spend on non-essential items, at 47 per cent and 53 per cent respectively (up from 46 per cent and 51 per cent). Confidence in household finances stabilised at 64 per cent, with the majority feeling able to manage their money without significant stress, and to make good financial decisions in uncertain times (both 57 per cent).

England’s World Cup run contributed to the volume of pub transactions growing 10.0 per cent in July, with the value of spending up 7.4 per cent, its highest level since December 2023 (7.9 per cent). Meanwhile, the overall hospitality & leisure category grew 2.2 per cent, with cinemas enjoying a 2.6 per cent boost, following the release of Toy Story 5 and The Odyssey.

Travel spending declined for the fifth consecutive month, down -0.3 per cent. Airlines contracted -6.0 per cent, but travel agents saw a 2.5 per cent uplift. Meanwhile, hotels, resorts and accommodation grew 2.6 per cent, suggesting holidaymakers are still prioritising staycations over trips abroad amid ongoing travel uncertainty, while making the most of higher UK temperatures.

Retail spending grew 2.1 per cent, building on June’s 1.9 per cent uplift. The sunny weather also boosted electronic stores (1.3 per cent), garden centres (4.0 per cent) and on clothing (2.0 per cent). This comes as one in five (20 per cent) UK adults said they bought light and cool summer clothes in response to the heatwave, while one in four (25 per cent) avoided cooking and exercising outdoors (26 per cent) as a result.

UK adults chose 24.6°C as their ideal summer temperature, 13.1°C lower than 2026’s record high, but one in eight (12 per cent) selected 30°C+. This drops further when considering different activities, with Brits claiming 22°C is their maximum for a comfortable night’s sleep and 23.7°C for exercising outdoors.

Half of UK adults (48 per cent) have now used AI for planning or budgeting – a significant uplift from 35 per cent in July 2025 – with product research, budgeting and holiday planning emerging as the top uses. Four in five (78 per cent) Gen Zs have used AI for these purposes, a nine-point rise year-on-year (from 69 per cent in July 2025). Of this group, 26 per cent have used AI tools to create a workout or fitness plan.

Rohan Kumar, Head of Spend Insights at Barclays, said “Card spending strengthened further in July, reaching its highest level for 12 months, with both essential and non-essential spend remaining in growth. Multiple factors played a part, with UK staycations, continued warm weather and England’s World Cup run lifting spending on travel, hospitality, everyday essentials and seasonal retail categories.”

Overall growth figures

	Spend Growth	Transaction Growth
Essential	2.9%	2.6%
Non-Essential	1.6%	2.1%
OVERALL	2.0%	2.3%
Retail	2.1%	3.2%
Clothing	2.0%	5.7%
Grocery	2.6%	3.9%
Supermarkets	2.2%	2.4%
Food & Drink Specialist	6.0%	11.6%
Household	-0.1%	4.4%
Home Improvements & DIY	-0.7%	0.5%
Electronics	1.3%	9.6%
Furniture Stores	-1.6%	1.9%
Garden Centres	4.0%	0.4%
General Retailers	2.7%	1.6%
General Retailers & Marketplaces	4.1%	4.2%
Department Stores	-2.3%	-7.5%
Discount & Rewards	1.6%	-2.2%
Specialist Retailers	2.3%	1.0%
Pharmacy, Health & Beauty	2.5%	-1.4%
Sports & Outdoor	-2.0%	-0.8%
Other Specialist Retailers	4.0%	4.5%
Hospitality & Leisure	2.2%	0.8%
Digital Content & Subscriptions	7.7%	3.0%
Eating & Drinking	3.1%	0.1%
Restaurants, Cafes & Bakeries	2.1%	-0.3%
Bars, Pubs & Clubs	7.4%	10.0%
Takeaways and Fast Food	1.8%	-5.0%
Entertainment	2.0%	4.3%
Hotels, Resorts & Accommodation	2.6%	1.8%
Travel	-0.3%	-0.5%
Travel Agents	2.5%	5.7%
Airlines	-6.0%	-1.8%
Public Transport	-5.4%	-4.6%
Other Travel	5.0%	6.4%
Other	1.3%	2.7%
Fuel	10.5%	1.8%
Motoring	-5.1%	6.7%
Other Services	-0.1%	0.7%
Insperiences	3.4%	0.6%
Online	1.8%	3.9%
Face-to-Face	2.2%	1.6%