Barclays research shows cost-cutting lengths Britons are going to | Personal Finance | Finance

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Consumer confidence in household finances has reached a 28-month high at 71 percent.

However, millions of Britons still face a squeeze on spending, which is hitting takings in the high streets and hospitality.

A record 73 percent of Brits are trying to cut the cost of their weekly shop, according to new research from Barclays.

It also highlighted the new phenomenon known as ‘loud budgeting’.

The bank said: “To control spending, 58 percent of Brits have openly discussed aspects of their finances with loved ones – otherwise known as ‘loud budgeting’ – with consumers most often talking about their goal to cut back on takeaways (29 percent) and restaurants (25 percent).”

A fifth (20 percent) of 18–34-year-old homeowners say they are delaying spending money on renovations due to rising living expenses.

With more people staying at home rather than going to the pub or eat out, Barclays picked up at 10.6 percent rise in spending on digital subscriptions for the likes of Netflix, Prime, Apple TV and Disney +, which was buoyed by releases such as ‘Baby Reindeer’ and ‘Ripley’.

The bank said the cold and wet weather hampered retail, which saw its first decline (-1.0 percent) since September 2022.

By contrast, sales through pharmacy, health & beauty stores, rose 4.9 percent. It is thought they continued to benefit from the ‘lipstick effect’ as women spent more on beauty luxuries to boost their mood.

Cutbacks on food and drink led to a decline for restaurants (-13.1 percent) and the smallest uplift in supermarket spending since June 2022 (+1.0 percent).

Jack Meaning, Chief UK Economist at Barclays, said: “With inflation expected to have dropped back to 2 per cent in April, and with many anticipating a boost from the National Living Wage increase, it is encouraging to see consumer confidence picking up.

“Given the long squeeze consumers have faced, it may take time for this to translate into stronger discretionary expenditure, but easing interest rates in the second half of this year should spur consumers’ confidence and spending.”

Karen Johnson, Head of Retail at Barclays, said: “Retailers were hopeful that discretionary spending would bounce back by mid-year, buoyed by falling inflation and the prospect of better weather.

“While improving consumer confidence offers a ray of hope for the retail and hospitality industries as the summer season approaches, many retailers have adjusted their expectations, anticipating no real recovery until the autumn.”

Mark Arnold, Head of Savings and Mortgages at Barclays, said: “Consumers and lenders alike are anticipating a drop in interest rates this year, but optimism is understandably tentative as the market is still feeling the effects of last year’s volatility.

“Our data shows that Brits are still facing higher rent and mortgage payments, although costs are still slowing down over the longer term.”


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