UK Consumer Spending Trends in August 2025

In August 2025, consumer card spending in the UK grew by just 0.5% year-on-year, a decline from 1.4% in July and below the Consumer Prices Index including owner occupiers' housing costs (CPIH) inflation rate of 4.2%. This stagnation in overall spending was accompanied by a notable shift in consumer behavior, with discretionary spending increasing by 2.0%, particularly in sectors like clothing, furniture, and health & beauty.

Consumer spending in pubs sees slight rise

The Barclays Consumer Spend report highlighted several key trends influencing consumer spending. Notably, spending in the health and beauty sector rose by 15.6%, marking 53 consecutive months of growth, attributed to the 'lipstick effect' where consumers prioritize small luxuries during economic downturns. Furniture store sales also surged by 11.6%, the highest increase since March 2022. Digital content and subscriptions saw a 5.6% rise, driven by the popularity of Netflix's animated film "KPop Demon Hunters."

Card spending grows by just 0.5 percent in August, but base rate cut helps ease pressure on personal finances

Consumer confidence in the UK economy improved significantly in August, rising to 28%, while confidence in the European and global economies reached 31% and 28%, respectively. Confidence in household finances remained steady at 73%, with 18% of consumers reporting that the recent base rate reduction alleviated their financial concerns. However, concerns about rising food prices persisted, with 89% of consumers expressing worries about inflation affecting essential goods.

Consumer spending in pubs sees slight riseCard spending grows by just 0.5 percent in August, but base rate cut helps ease pressure on personal financesCard spending grows by just 0.5 per cent in August, but base rate cut helps ease pressure on personal financesShopper confidence falls as Brits expect food inflation to climb

Despite the positive indicators, experts caution that the overall economic outlook remains subdued. Jack Meaning, Chief UK Economist at Barclays, noted that while consumer confidence has improved, uncertainty surrounding the upcoming Budget could dampen spending. He emphasized that further interest rate cuts may be necessary to sustain economic growth.

Consumer spending in pubs sees slight rise

Karen Johnson, Head of Retail at Barclays, remarked, “Encouragingly, confidence in household finances remained steady in August, suggesting that while the cost of living is still front of mind, consumers are learning to navigate the challenges and make the most of their budgets.” Meanwhile, Jack Meaning added, “It is great to see consumer confidence improve in August, and households feel the benefit of another Bank of England rate cut. However, the outlook for the rest of the year remains subdued.”

Consumer spending in pubs sees slight rise

• “Household finances Barclays head of retail Karen Johnson said “Encouragingly, confidence in household finances remained steady in August, suggesting that while the cost of living is still front of mind, consumers are learning to navigate the challenges and make the most of their budgets.” — Karen Johnson, Head of Retail at Barclays

Consumer spending in pubs sees slight rise

• “It is great to see consumer confidence improve in August, and households feel the benefit of another Bank of England rate cut. However, the outlook for the rest of the year remains subdued, particularly as Budget speculation is likely to add to uncertainty for both households and businesses. In our view, it will take further interest rate cuts to provide the economy with a sustained boost.” — Jack Meaning, Chief UK Economist at Barclays

Card spending grows by just 0.5 per cent in August, but base rate cut helps ease pressure on personal finances

The data from August 2025 indicates a complex landscape for UK consumer spending, characterized by modest overall growth, significant sector-specific gains, and a cautious outlook amid inflationary pressures. As consumers adapt to economic challenges, the focus on discretionary spending and small luxuries suggests a nuanced recovery, albeit one that requires careful monitoring in the face of ongoing economic uncertainties.

Consumer spending in pubs sees slight rise