Consumer spending rose +3.4% YoY in April, with some evidence of a rebound in spending as shoppers ventured back outside after March’s cold snap, according to the latest data from Barclaycard.
Expenditure on ‘nice-to-haves’ performed well, up +3.7%, while essential spending slowed to a 21-month low. While overall confidence in household finances remains stable, the potential for an interest rate rise continues to weigh on consumers’ minds – with over a third (35%) indicating they would cut back their spending in the event of a rate hike.
Of these, over half (54%) would pare back on treats for themselves and others, while 44% would manage their finances by shopping at discount stores more often. A similar proportion (41%) say they would rein-in their nights out, suggesting that even the experience economy – which has performed strongly over the past year – is not immune.
Barclaycard MD Paul Lockstone says: “While spending has recovered slightly from the effects of the Beast from the East, it’s likely we’ve seen some missing expenditure from March carry over to April as the weather finally allowed shoppers to venture back outside.
“Consumers prioritised spending on the ‘nice-to-haves’ last month, but there’s no indication that they are looking to loosen the purse strings quite yet. Instead, the UK seems to be caught in a holding pattern, with people still budgeting carefully. Looking ahead, uncertainty around interest rates is weighing on the minds of many, with people prepared to cut back on non-essentials in order to cope with a rate rise.”
