UK Travel Spending Drops for First Time in Five Years Amid Cost of Living and Iran War Fears
UK consumers have reduced travel spending for the first time in five years, driven by rising cost of living concerns and geopolitical tensions stemming from the Iran war. According to Barclays data, overall consumer card spending rose by a modest 0.9% year-on-year in March, a slowdown from February’s 1% increase. Travel expenditure fell by 3.3%, with significant declines in spending at travel agents, airlines, and public transport. However, domestic accommodation spending increased by 1.2% as travelers opted for UK-based holidays. The ongoing Middle East conflict has prompted many adults to delay major purchases and boost savings against potential energy cost hikes, despite a recent temporary reduction in the energy price cap. While spending on essentials like fuel rose due to surging oil prices, discretionary spending on clothing and entertainment remained resilient. Economists suggest that consumer caution will likely mute economic activity in coming months, influencing the Bank of England’s upcoming interest rate decisions. Although household financial confidence remains relatively high, optimism regarding the broader UK and global economic outlook has declined significantly.
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UK Travel Spending Drops for First Time in Five Years Amid Cost of Living and Iran War Fears
UK consumers have reduced travel spending for the first time in five years, driven by rising cost of living concerns and geopolitical tensions stemming from the Iran war. According to Barclays data, overall consumer card spending rose by a modest 0.9% year-on-year in March, a slowdown from February’s 1% increase. Travel expenditure fell by 3.3%, with significant declines in spending at travel agents, airlines, and public transport. However, domestic accommodation spending increased by 1.2% as travelers opted for UK-based holidays. The ongoing Middle East conflict has prompted many adults to delay major purchases and boost savings against potential energy cost hikes, despite a recent temporary reduction in the energy price cap. While spending on essentials like fuel rose due to surging oil prices, discretionary spending on clothing and entertainment remained resilient. Economists suggest that consumer caution will likely mute economic activity in coming months, influencing the Bank of England’s upcoming interest rate decisions. Although household financial confidence remains relatively high, optimism regarding the broader UK and global economic outlook has declined significantly.
The Guardian