UK Card Spending Dips for First Time Since COVID

British consumers reportedly pulled back on their debit and credit card spending this year.

It marks the first decline in card spending since the COVID pandemic, Bloomberg News reported Tuesday (Dec. 30), citing data from Barclays which showed consumers were still willing to shell out for small luxuries and experiences.

The value of card spending dipped 0.2% between 2024 and 2025, the report said, following 1.6% growth last year. It marked the first decline since 2020, when the COVID lockdowns helped drive down card spending 7.1%.

The data showed consumers in the U.K. were willing to splurge on smaller luxuries and experiences, such as tickets for high-profile musicians like Oasis, Coldplay and Sabrina Carpenter, the report added.

The strongest spending increase happened in the pharmacy, health and beauty space, at 9.5%, the report said, calling it a sign of the “lipstick effect.” That’s when consumers spend on smaller luxury products to improve their moods during tough financial times.

However, spending on essentials fell 2.3% year over year, including a 1.7% decline in supermarkets. The value of non-essential spending rose slightly at 0.8%.

According to the report, the data confirms a slowing in consumer spending as confidence is sapped by inflation, unemployment and political uncertainty.

Research by PYMNTS Intelligence has found that consumers are under similar pressures on the other side of the Atlantic.

That research shows warning signs from what PYMNTS Intelligence calls the Labor Economy®, or workers such as warehouse packers, delivery drivers, home health aides, construction workers, groundskeepers, janitors and retail associates.

At the height of the holiday shopping season, nearly half of these workers told PYMNTS they had little to no confidence they can afford to buy presents without going into debt until next summer. Just a third who hadn’t started shopping by Dec. 10 said they planned to buy anything at all, compared to 46% of other consumers.

These workers make up one-third the total U.S. workforce, and drive 15% of consumer spending, making them a substantial economic bloc.

“When they dial back their spending, the broader economy takes a hit, creating ripple effects at the businesses their spending supports,” PYMNTS wrote Tuesday. “Even small interruptions — think missed work shifts, reduced hours or a late direct deposit — can instantly stymie these workers’ ability to pay rent, buy groceries, make debt payments and pay for childcare.”

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