Agents see July upturn in consumer card spend and transactions

Travel agents saw a second successive month of improved spending in July following declines in April and May.

Card outlay with agents last month rose by 2.5% compared with a marginal decline of 0.1% in June, with transaction levels rising by 5.7%, latest Barclays data shows.

But overall travel spending declined for the fifth consecutive month, down 0.3%. Airlines contracted by 6% with transactions down by 1.8%.

Meanwhile, hotels, resorts and accommodation grew 2.6%, suggesting holidaymakers are prioritising domestic stays over trips abroad amid ongoing travel uncertainty, while making the most of higher UK temperatures, the bank suggested.

Total card spending grew by 2% year on year in July, following a 1.9% increase in June, but remained below the latest consumer price list inflation rate of 2.8%.

Essential spending grew 2.9% and non-essential spend increased 1.6%, with the England football team’s run at the World Cup, the July heatwave and recovering consumer confidence all contributing to the uplift.

Total retail spending grew 2.1%, building on a 1.9% rise in June, the consumer card spend report found.

Consumers reported feeling more confident in both their job security and ability to spend on non-essential items, at 47% and 53% respectively - up from 46% and 51%.

Confidence in household finances stabilised at 64%, with the majority feeling able to manage their money without significant stress, and to make good financial decisions in uncertain times (both 57%), according to Barclays research.

At the same time, confidence in the strength of the UK economy reached 30% in July – representing a 21 month-high and a six-percentage point improvement on June, according to Barclays.

Confidence in the European economy also climbed six points to 35% – the highest level recorded since Barclays started tracking the measure in 2015.

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.”