UK consumer card spending increased by 2.0% year on year in July, although spending on household goods remained subdued despite improving confidence in the economy, according to new data from Barclays.
The latest Barclays Consumer Spend report found overall retail spending grew by 2.1% during the month, building on the 1.9% increase recorded in June.
However, performance across home-related categories was mixed. Overall household spending fell by 0.1%, while furniture store spending declined by 1.6% and home improvement and DIY was down 0.7%.
Garden centres were among the month’s stronger performers, recording a 4.0% increase in spending as the prolonged warm weather supported demand. Electronics spending also increased by 1.3%, while general retailers and marketplaces recorded growth of 4.1%.
Department stores experienced a more difficult month, with spending falling 2.3% and transaction volumes down 7.5%.
The figures come despite a notable improvement in consumer sentiment. Confidence in the strength of the UK economy climbed six percentage points to 30% in July – its highest level in 21 months.
Consumers also became more confident about their ability to spend on non-essential purchases, with the measure rising from 51% in June to 53% in July. Job security confidence increased to 47%.
Overall non-essential spending subsequently increased by 1.6%, while essential spending rose 2.9%. Total card spending growth of 2.0%, however, remained below the latest CPIH inflation rate of 2.8%.
The July heatwave also influenced shopping behaviour. Barclays found one in five UK adults bought lighter and cooler summer clothing in response to the temperatures, while retail spending overall increased 2.1%.
Rohan Kumar, Head of Spend Insights at Barclays, 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 report also highlighted the growing influence of artificial intelligence on purchasing decisions. Almost half (48%) of UK adults said they had used AI for planning or budgeting, up significantly from 35% in July 2025, with product research among its most common uses.
Among Gen Z consumers, the proportion using AI for planning or budgeting reached 78%, compared with 69% a year earlier.
Barclays’ spending data is based on hundreds of millions of debit and credit card transactions, with the bank accounting for almost 40% of UK credit and debit card transactions.
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