Growth in consumer card spending decreased –1.7% year-on-year in December, a further decline from November (-1.1%) and considerably less than the latest CPIH inflation rate of 3.5%. It marked the greatest annual fall in spending since February 2021 (-9.5%), as consumers continue to combat rising costs by making and planning cutbacks.
Consumer confidence showed signs of recovery, with confidence in household finances rising to 66% (up from 64% in November and 63% in October) albeit below 2025’s average of 70%. Similarly, consumers are regaining confidence in their job security and ability to spend on non-essentials, which both improved three percentage points month-on-month, to 46% and 55% respectively. Confidence in the UK economy grew to 24%, after remaining subdued at 22% in both October and November.
Barclays consumer confidence measures
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | ||||||||||||||
| Household finances | 70% | 75% | 70% | 70% | 67% | 73% | 72% | 73% | 74% | 63% | 64% | 66% | |||||||||||||
| Job security | 47% | 48% | 46% | 48% | 47% | 50% | 48% | 48% | 47% | 44% | 43% | 46% | |||||||||||||
| Non-essential spending | 56% | 59% | 58% | 60% | 56% | 59% | 58% | 60% | 60% | 51% | 52% | 55% | |||||||||||||
| Ability to live within means | 74% | 77% | 73% | 74% | 74% | 76% | 75% | 77% | 78% | 70% | 71% | 71% | |||||||||||||
| Strength of UK economy | 21% | 25% | 23% | 24% | 28% | 25% | 22% | 28% | 25% | 22% | 22% | 24% |
Inflation concerns endure as shoppers prioritise cutbacks
Despite improving consumer confidence, food price and general inflation concerns both increased in December, to 86% and 85% respectively (from 84% and 83% in November). Two in three (64%) say they plan to cut spending on groceries in 2026, and of this group, three in five (59%) say they will make use of loyalty schemes, 52% will shop at budget supermarkets and 46% will buy own-brand products.
Over half (56%) intend to reduce discretionary spending, with clothes/accessories (48%) and restaurant meals (47%) emerging as the top cutbacks, which comes as non-essential spending saw its greatest decline since February 2021 in December, down -1.3%.
Pubs and home purchases prove popular
Pub spending returned to growth in December, up 1.9%, after three consecutive months of decline. Festive socialising was a significant contributor, with transaction volumes spiking on 13th and 20th December, the two Saturdays before Christmas.
Amid the growing popularity of Dry January, half (50%) say they’re planning a quieter January with fewer social plans, rising to 56% for those aged 18-34. Two in five (40%) report limiting socialising due to costs, as 39% overall say the expense prevents them from going out as often as they would like to.
Spending on entertainment was flat in the month, at 1.0%, however digital content & subscriptions saw growth of 7.8 %, helped by follow ups to popular streaming series such as Stranger Things and Emily in Paris, as viewers sheltered from the cold.
Overall retail spending saw its greatest year-on-year decline since November 2024, down -1.9%. Both garden centres (2.5%) and food & drink specialist stores (2.9%) bucked the trend however, continuing their strong performance through to the end of 2025.
Financial and physical health in focus for 2026
More than half (55%) of UK consumers say they will focus more on their wellbeing in 2026, while 51% are setting a New Year’s goal or resolution. Of this group, one in three (35%) are setting a health/fitness-related goal, with a similar proportion (33%) setting a financial goal.
For those with a financial resolution, the most popular goals include saving more each month (47%), sticking to a budget (39%) and spending less on eating and drinking out (30%). Those with a health resolution listed drinking more water (52%), swapping processed for whole foods (45%) and trying to improve their sleep (45%) among their top goals.
Karen Johnson, head of retail at Barclays, said: “Despite there being encouraging signs that consumer confidence is recovering, shoppers will undoubtedly pay increasing attention to value for money in 2026, as many look to loyalty schemes and budget supermarkets. Meanwhile the New Year has brought with it a renewed focus on both financial and physical wellbeing, which will result in more considered and conscientious spending. Wellness, beauty and fitness will all benefit from this shift in priorities in 2026 and beyond.”
Jack Meaning, chief UK economist at Barclays, said: “These numbers suggest 2025 ended with a whimper, following the slowdown we saw define last year. However, we expect inflation to ease significantly in the first half of 2026, which, alongside a further easing of interest rates, should provide consumers with respite, unlocking real spending power. If the tentative signs of improving confidence can last beyond the New Year, then UK activity could strengthen as the year goes on.”
Overall growth figures
| Spend Growth | Transaction Growth | |
| Essential | -2.7% | -3.7% |
| Non Essential | -1.3% | -2.8% |
| OVERALL | -1.7% | -3.1% |
| Retail | -1.9% | -1.8% |
| Clothing | -1.0% | 0.3% |
| Grocery | -2.3% | -2.4% |
| -2.9% | -5.5% |
| 2.9% | 14.1% |
| Household | -3.7% | -1.1% |
| -6.4% | -9.7% |
| -4.0% | 3.7% |
| -0.7% | -0.2% |
| 2.5% | 1.7% |
| General Retailers | -3.1% | -1.8% |
| 0.5% | 2.9% |
| -7.3% | -5.9% |
| -6.5% | -8.8% |
| Specialist Retailers | -0.3% | -3.7% |
| 2.0% | -3.7% |
| -5.0% | -4.5% |
| -0.3% | -3.5% |
| Hospitality & Leisure | 0.9% | -5.2% |
| Digital Content & Subscription | 7.8% | 1.5% |
| Eating & Drinking | 0.4% | -6.2% |
| 1.5% | -2.7% |
| 1.9% | -0.5% |
| -2.1% | -13.6% |
| Entertainment | 1.0% | -5.7% |
| Hotels, Resorts & Accommodation | -0.3% | -4.5% |
| Travel | 2.1% | -5.9% |
| 7.2% | 16.5% |
| -1.5% | -5.9% |
| -2.2% | -9.4% |
| 1.2% | -0.6% |
