Consumer spending hits 13-month high

Consumer spending reached a 13-month high in August, driven by a resurgence in entertainment and travel, according to analysis by Barclays.

Card spending grew by 2.1 % year-on-year in August, building on July’s 2.0 % increase, but remaining below the latest CPIH inflation rate of 3.1 %. Both essential and non-essential spending increased 2.1 %, 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 % in August, up from 64 % in July. Consumers also reported feeling more confident in their ability to live within their means (71 %, up from 69 %) and spend on non-essentials (54 %, up from 53 %).

Meanwhile, confidence in the UK economy sat at 26 %, lower than July’s 30 % (which represented a 21-month high), but higher than the 2026 average of 24 %, suggesting economic confidence is stabilising. Similarly, confidence in the European and global economies returned to June’s levels of 29 % and 26 %, respectively, after spiking to 35 % and 27 % in July.

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

84 % are concerned about rising prices, while three in four cite ‘shrinkflation’ (declining product size – 77 %) and ‘skimpflation’ (declining product quality – 76 %) concerns. Chocolate and sweets are the most common items consumers have noticed declining in quality (46 %), followed by crisps (31 %), dairy products (24 %) and bread/bakery products (21 %). Shoppers are also considering the impact of recent heatwaves on the price and availability of certain foods, particularly vegetables, fruit and dairy products:

Growth in travel spending reached 3.1 % 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 % and travel agents saw a 4.4 % boost. Separately, hotels, resorts and accommodation grew 3.5 %, which comes as more holidaymakers are opting for UK staycations over trips abroad in 2026, at 36 % in comparison to 33 %. Meanwhile, 14 % overall are actively looking for travel discounts, offers, and last-minute deals.

Travel’s strong performance contributed to a 3.3 % boost for hospitality and leisure, and entertainment emerged as one of the month’s big winners, up 5.9 %, led by cinemas and bowling allies, as many sought out air-conditioning and ventured out to see the summer’s major blockbusters, such as The Odyssey and Spider-Man: Brand New Day. Eating and drinking grew 1.8 %, with both pubs, bars and clubs (2.7 %) and restaurants, cafes and bakeries (1.5 %) in growth. Retail spending increased 1.2 %.

After the UK’s hottest summer on record, two in five (41 %) say they are ready for the season to be over. Almost half of UK adults (46 %) say they have enjoyed this summer less because of the heatwaves, and 53 % are looking forward to cooler autumn weather. Beyond temperatures, half (48 %) are looking forward to autumnal activities, 41 % are eager to wear autumn clothing and 35 % are looking forward to 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 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 focused, 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.”

 

Barclays consumer confidence measures
	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug
Household finances	66%	67%	65%	64%	65%	64%	64%	66%
Job security	43%	44%	44%	43%	43%	46%	47%	44%
Ability to spend on non-essentials	54%	55%	53%	49%	52%	51%	53%	54%
Ability to live within means	71%	74%	71%	69%	70%	70%	69%	71%
Strength of the UK economy	24%	25%	21%	22%	25%	24%	30%	26%
Strength of the European economy	28%	29%	26%	25%	28%	29%	35%	29%
Strength of the global economy	25%	24%	21%	20%	25%	26%	27%	26%

 

Are you concerned about the price and availability of each of the following, as a result of recent heatwaves?	Concerned about price	Concerned about availability
Vegetables	70%	68%
Dairy	69%	63%
Fruit	67%	66%
Grains (inc. bread, rice, etc.)	66%	62%
Meat	62%	57%
Christmas food and drink items	52%	47%
Seafood	45%	41%