Card spending grows 2.1 per cent in August, as travel rebounds and confidence in household finances improves

Card spending grew by 2.1 per cent year-on-year in August, building on July’s 2.0 per cent increase, but remaining below the latest CPIH inflation rate of 3.1 per cent, according to the The Barclays Consumer Spend report.

Both essential and non-essential spending increased 2.1 per cent, helped by improving consumer confidence and the strong performance of hospitality & leisure.

Consumers’ confidence in their household finances reached its highest level in six months, at 66 per cent in August, up from 64 per cent in July. Consumers also reported feeling more confident in their ability to live within their means (71 per cent, up from 69 per cent) and spend on non-essentials (54 per cent, up from 53 per cent).

Meanwhile, confidence in the UK economy fell four percentage points to 26 per cent, down from July’s 21-month high of 30 per cent, but remained above the 2026 average of 24 per cent. Similarly, confidence in the European and global economies returned to June’s levels of 29 per cent and 26 per cent respectively, after spiking to 35 per cent and 27 per cent in July.

Growth in travel spending reached 3.1 per cent in August, its highest level year-to-date and a marked improvement after five consecutive months of decline. Within the category, airline spend grew for the first time since August 2025, up 3.5 per cent and travel agents saw a 4.4 per cent boost.

Separately, hotels, resorts and accommodation grew 3.5 per cent, which comes as more holidaymakers are opting for UK staycations over trips abroad in 2026, at 36 per cent in comparison to 33 per cent. Meanwhile 14 per cent overall are actively looking for travel discounts, offers, and last-minute deals.

Eating and drinking grew 1.8 per cent, with both pubs, bars and clubs (2.7 per cent) and restaurants, cafes and bakeries (1.5 per cent) in growth. Meanwhile, retail spending increased 1.2 per cent, with electronics (2.0 per cent) and clothing (0.9 per cent) contributing to growth amid sustained warmer weather in August.

Rohan Kumar, Head of Spend Insights at Barclays, said: “Card spending continued to build momentum in August, reaching a 13 month-high, while consumer confidence in their own finances showed signs of recovery. Growth in discretionary purchases and strong performances across travel, eating and drinking, and entertainment all contributed to a boost for hospitality and leisure, suggesting many finished summer by prioritising holidays, social occasions and memorable experiences, even as price and value concerns stayed firmly front of mind.”

Jack Meaning, Chief UK Economist at Barclays, said: “Consumer spending and confidence remained resilient in August, even as pressures from the Middle East began to filter into prices. This positive news suggests consumers should be able to weather the bout of narrowly focussed, temporary inflation we think is coming down the track. However this week has shown risk remains. If the situation in the Middle East persists or intensifies in the coming months, squeezed households may need to be even more discerning with their spend.”