UK consumer spending strengthened in July as staycations, warmer weather and England’s World Cup run helped drive growth across retail, according to new Barclays data.

Card spending rose two per cent year on year during the month, edging up from the 1.9 per cent increase recorded in June, although growth remained below the latest CPIH inflation rate of 2.8 per cent.

Essential spending increased 2.9 per cent, while discretionary spending climbed 1.6 per cent as shoppers reported growing confidence in their job security and ability to spend on non-essential items.

Retail spending rose 2.1 per cent, building on June’s 1.9 per cent increase, with the hot weather providing a lift to several seasonal categories.

Garden centre spending climbed four per cent, clothing was up two per cent and electronics rose 1.3 per cent. One in five consumers said they had bought lighter and cooler summer clothing in response to the heatwave.

Hospitality and leisure also benefited from a busy summer of sport and entertainment, with spending across the category up 2.2 per cent.

Bars, pubs and clubs recorded a 7.4 per cent rise in spending, while transaction volumes jumped 10 per cent as England’s World Cup run encouraged consumers to head out to watch matches.

Cinemas reported a 2.6 per cent uplift following releases including Toy Story 5 and The Odyssey, while digital content and subscription spending continued to outperform, rising 7.7 per cent.

Staycations buoy travel spend

Travel spending slipped 0.3 per cent year on year, marking its fifth consecutive month of decline, as consumers continued to favour domestic breaks over overseas trips.

Airline spending fell six per cent, while public transport dropped 5.4 per cent.

However, hotels, resorts and accommodation grew 2.6 per cent, while travel agent spending increased 2.5 per cent, which Barclays said suggested holidaymakers were continuing to prioritise UK staycations amid travel uncertainty and warmer domestic weather.

Consumer confidence also improved during July.

Confidence in the strength of the UK economy climbed six percentage points to 30 per cent, its highest level in 21 months.

Confidence in the European economy also rose six points to 35 per cent, the highest level since Barclays began tracking the measure in 2015.

Meanwhile, confidence in job security edged up to 47 per cent from 46 per cent, while consumers’ confidence in their ability to spend on non-essential items increased to 53 per cent from 51 per cent.

Barclays head of spend insights Rohan Kumar said: “Card spending strengthened further in July, reaching its highest level for 12 months, with both essential and non-essential spend remaining in growth.

“Multiple factors played a part, with UK staycations, continued warm weather and England’s World Cup run lifting spending on travel, hospitality, everyday essentials and seasonal retail categories.”

The data also showed growing use of artificial intelligence among consumers for planning and budgeting.

Almost half of UK adults, 48 per cent, said they had used AI for planning or budgeting, up from 35 per cent in July last year, with product research, budgeting and holiday planning among the most common uses.

Among Gen Z consumers, the figure rose to 78 per cent, up nine per cent points year on year.

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