UK Consumer Spending Declines for First Time Since 2020 Amid Inflation Pressures
UK consumer spending fell 0.2% in 2025, marking the first annual drop since the pandemic-induced 7.1% plunge in 2020. Barclays data reveals a pullback in debit and credit card expenditures as households grapple with rising living costs, stagnant wages, and economic uncertainty.
Disposable incomes adjusted for inflation dropped 0.8% in Q3, extending the longest income stagnation since 2014. Analysts warn weak consumption and high savings rates act as anchors on Britain's consumer-driven economy, jeopardizing even modest growth projections.
While grocery prices dipped 1.7% and essential goods costs fell 2.3%, households continue prioritizing small indulgences over luxury purchases. The spending retreat signals deepening inflationary pressures across key sectors of the UK economy.
