UK Consumer Spending Declines Amid Budget Uncertainty

In November 2025, UK consumers significantly reduced their spending, marking the fastest decline in nearly five years. This downturn coincided with uncertainty surrounding the Autumn Budget presented by Finance Minister Rachel Reeves on November 27. According to Barclays, card spending fell by 1.1% year-on-year, the largest drop since February 2021, when the COVID-19 pandemic was still impacting the economy. The British Retail Consortium (BRC) reported a modest 1.4% increase in spending at major retailers, the slowest growth rate since May.

ReutersThe GuardianLate Budget dampens Black Friday spending

Despite the overall decline, Black Friday, which occurred on November 28, saw a notable increase in transaction volumes, up 62.5% compared to an average day in 2025. However, the BRC and KPMG indicated that the anticipated sales boost was less impactful than in previous years due to consumer hesitance. Food sales rose by 3%, but this increase lagged behind the average inflation rate of 3.6%. Non-food sales growth was minimal, with only a 0.1% increase year-on-year, below the 12-month average of 1.6%.

The Guardian

Helen Dickinson, chief executive of the BRC, emphasized that "pre-budget jitters among shoppers meant the month of Black Friday did not deliver as strongly as retailers had hoped or the economy needed." Barclays' chief UK economist, Jack Meaning, noted that despite the Black Friday boost, consumer spending remained muted, reflecting a broader economic deceleration throughout 2025. He raised concerns about whether easing interest rates and falling inflation could stimulate a rebound in consumer spending or if ongoing fiscal tightening would prolong economic malaise into 2026.

The GuardianReutersLate Budget dampens Black Friday spending

Opposition parties have criticized Rachel Reeves for contributing to consumer uncertainty through months of speculation leading up to the budget announcement. Retailers, particularly medium-sized businesses and pub chains, have expressed concerns about the impact of proposed changes to business rates, which they argue could exacerbate their financial challenges.

The Guardian

While Barclays reported a significant drop in overall consumer spending, the BRC highlighted that certain sectors, such as travel agents, experienced a boost, with a 10.7% increase in sales during Black Friday. This discrepancy illustrates the uneven impact of economic conditions across different retail sectors.

Reuters

Looking ahead, the Bank of England is expected to consider cutting interest rates from 4% to 3.75% in response to the economic slowdown and rising unemployment. Retailers are hopeful that clearer public policy measures can revive consumer confidence and support economic recovery as they navigate the challenges posed by the current fiscal environment.

The Guardian