Card spending jumps in 2023 as Brits splash out on travel and booze
Debit and credit card spending jumped this year despite inflation and higher household bills, as Brits forked out on holidays and nights out at pubs and bars.
The latest data from Barclays showed card spending increased by 4.1 per cent in 2023, as the UK “prioritised moments of joy and shared experiences.”
The figures were buoyed by a bumper crop of blockbuster events, including sell-out tours from Taylor Swift and Beyoncé and the pop culture power movie duo Barbenheimer, which fuelled a 6.3 per cent rise in cinema spending.
Soaring demand for travel after years of Covid-era restrictions saw spending on travel agents and airlines jump 10.4 and 30.8 per cent respectively. In November, a fifth of consumers said they had planned more holidays in 2024 as they wished to catch up on trips missed during lockdowns.
But this could not offset rampant inflation and rising housing bills, with the 4.1 per cent figure ultimately significantly lower than last year’s 10.6 per cent rise. Some 47 per cent of consumers said they were planning to cut down on discretionary spending over the autumn and winter, due to higher energy bills.
Volatile weather also cast a cloud over high-street spending, with clothing stores down 0.5 per cent as Brits held back on making seasonal clothing purchases in May, July and October.
Esme Harwood, director at Barclays, said: “Brits prioritised memorable experiences and shared moments with loved ones this year, boosting pubs, travel and entertainment. Many were keen to make up for lost opportunities during the pandemic by booking holidays, treating themselves to concert tickets, and enjoying nights out with friends.”
“However, certain sectors saw noticeable cutbacks. Restaurants and clothing stores were hampered by the unpredictable weather, as well as the impact of rising household bills on consumers’ personal finances.
She added: “Nonetheless, Brits’ confidence in their ability to spend within their means has remained resilient, as they become more resourceful and adept in finding ways to balance their budgets.”
Heading into 2024, Jack Meaning, chief UK economist at Barclays, said it was “time to look for the positives.”
Meaning added: “We expect to see the Bank of England start easing interest rates from the middle of the year, and in fact, we’re already seeing mortgage rates come down in anticipation. This is as the speed of price rises slows, which should continue to provide at least some boost to the spending power of people who have been squeezed through the cost-of-living crisis.”
“2024 will be a year of transition, from headwinds to tailwinds, but come next December we should be able to toast the New Year with more festive spirit.”