The level of spending growth with agents fell back in March but still outpaced other non-travel sectors, new data reveals.
Barclays consumer card outlay analysis for last month found an increase in spending of 7.1%, down from 10.1% in February and 8% in January.
However, the rise in total transactions of 12.6% in March was only marginally down on the 15.3% increase recorded the previous month.
Airlines saw increased month-on-month spending of 9.7% with transaction growth of 13.4%.
Overall travel spend growth was recorded at 7.8%, with monthly transactions up by 8.6% when public transport and other travel was included.
This compared with growth of just 1% for hotels, resorts and accommodation and 2.6% for eating and drinking.
But overall spending growth flatlined in March, on par with February’s rise of 1.9%, according to Barclays.
“This was largely due to a slowdown in non-essential spending, which saw its smallest increase (1.6%) since September 2022, as wet weather dampened both retail and restaurant sales,” the bank said.
“This comes as 45% of consumers say they are continuing to rein in discretionary spending, with the majority (53%) of this group cutting back on clothing and accessory purchases, and nearly half (47%) spending less on dining out.”
Barclays head of retail Karen Johnson said: “Retailers were braced for a more subdued start to 2024, and recent figures are in line with expectations. The wet weather has been a key factor in the slowdown in discretionary spending, as it’s meant fewer visits to the high street and to hospitality venues.
“However, in spite of this initial lull, many retailers are confident that spending will rebound in the coming months, particularly in anticipation of better weather, the energy price cap drop, an uplift in the National Minimum Wage, and the buzz around major events such as Taylor Swift’s Eras Tour and the Paris 2024 Olympics.”
Chief UK economist Jack Meaning added: “While still only tentative, the signs that the UK economy is expanding into 2024 continue to build.
“With an expectation that the Bank of England will cut interest rates from June, and banks responding by reducing mortgage rates, our research suggests that the housing costs that have been a drag on consumers for over a year are on the cusp of a turn, and will become a boost to spending from H2 and beyond. Today’s data shows this transition happening in real time.”