Consumer card spending drops in December as 2025 'ends with a whimper'

Consumer card spending decreased by 1.7% year-on-year in December, a further decline from November (-1.1%) and considerably less than the latest CPIH inflation rate of 3.5%.

It marked the greatest year-on-year decline in spending since February 2021 (-9.5%), as consumers combatted rising costs by making and planning cutbacks.

That’s according to the latest Barclays Consumer Spend report, which combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending.

Moving forward, over half of UK adults (56%) intend to reduce discretionary spending.

That comes as non-essential spending saw its greatest decline since February 2021 in December, down 1.3%. Essential spend also declined for the eighth consecutive month in December.

Despite the fall in sales, consumer confidence “showed signs of recovery”, with confidence in household finances rising to 66% from 64% in November and 63% in October. However, that was below 2025’s 70% average.

More than half (55%) of UK consumers say they plan to focus more on their wellbeing in 2026, while 51% are setting a New Year’s goal or resolution - rising to 88% among Gen Z and 70% among Millennials.

Over one in three (35%) of UK consumers are setting a health/fitness-related goal in 2026, with a similar proportion (33%) setting a financial goal.

For those with a financial resolution, the most popular goals include saving more each month (47%), sticking to a budget (39%) and spending less on eating and drinking out (30%).

Karen Johnson, Head of Retail at Barclays, said: “Despite there being encouraging signs that consumer confidence is recovering, shoppers will undoubtedly pay increasing attention to value for money in 2026, as many look to loyalty schemes and budget supermarkets.

“Meanwhile, the New Year has brought with it a renewed focus on both financial and physical wellbeing, which will result in more considered and conscientious spending. Wellness, beauty and fitness will all benefit from this shift in priorities in 2026 and beyond.”

Jack Meaning, Chief UK Economist at Barclays, added: “These numbers suggest 2025 ended with a whimper, following the slowdown we saw define last year. However, we expect inflation to ease significantly in the first half of 2026, which, alongside a further easing of interest rates, should provide consumers with respite, unlocking real spending power.

“If the tentative signs of improving confidence can last beyond the New Year, then UK activity could strengthen as the year goes on.”