UK consumer card spending grew just 2.6% in October amid rising bills and Christmas costs

Consumer card spending grew just 2.6% year-on-year in October 2023 - noticeably less than the latest CPIH inflation rate of 6.3% and the smallest uplift since September 2022 (+1.8%).

It comes as Brits face rising energy bills and outgoing costs ahead of the festive period, hindering discretionary spending, according to the latest data and consumer confidence survey from Barclays, which sees nearly half of the nation’s credit and debit card transactions.

The unusually warm October weather meant Brits also held off buying seasonal items such as winter coats and jumpers, contributing to the fourth consecutive monthly fall at clothing retailers, at -3%.

Over a third (36%) expect this Christmas will be more expensive than in 2022. As a result, nearly one in five (18%) have already started buying gifts to spread the cost, while 14% have spoken to loved ones to "make a mutual agreement to cut back on gift-giving".

On a more positive note, pubs, bars and clubs had another strong month in October, up 5.9% and boosted by the Rugby World Cup for the second month running, while a rise in holiday bookings of 10.5% boosted travel.

Esme Harwood, Director at Barclays, said: "Brits cut back on non-essential categories such as clothing and restaurants in October, as thoughts turned to saving for Christmas and budgeting for winter fuel bills."

Jack Meaning, Chief UK Economist at Barclays, added: "It looks as though the oomph continues to go out of squeezed UK consumers. The latest transaction data shows they are pulling back from discretionary spending and increasingly worried about their future ability to spend, adding to the picture painted by other data.

"Third-party consumer confidence data showed a significant drop in October, coming off the back of retail sales contracting significantly in September. While some of these effects might be being amplified by unseasonal weather, it's hard to dismiss the growing evidence."

The consumer confidence survey was carried out between 20-24 October 2023 by Opinium Research on behalf of Barclays. There were 2,000 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.