Spending on agents and air fares soars as consumers head overseas

Spending on airlines soared by 34% year on year during May, according to the Barclays Consumer Spending Index.

It also reported expenditure with travel agents rose by almost 10% year on year last month, with the number of transactions rising by almost 20%, as overseas travel continued to buck wider trends.

The bank’s latest report into customers’ credit and debit card spending found that expenditure on hotels, resorts and accommodation saw a 5% decline, “showing that demand for staycations is tapering off now that holidaymakers have the option to travel abroad”, said Barclays.

Overall, consumer card spending grew 3.6% in May, as Brits cut back on discretionary purchases to cope with mounting inflation and food prices.

However, Barclays noted that May’s long bank holiday weekends provided a “welcome uplift” to pubs, bars and clubs and the entertainment sector.

Spend on fuel saw its third consecutive month of decline in May – down 10.7% year-on-year – largely thanks to the drop in prices against May 2022, when they were much higher due to the Russian invasion of Ukraine.

Esme Harwood, director at Barclays, said: “Consumers are still paying close attention to their everyday spending. Many are having to forgo discretionary purchases to offset rising food prices, with clothing and restaurants most impacted.

“However, the growth witnessed at pubs, airlines and entertainment venues shows that Brits are still finding room in the budget to enjoy nights out and holidays.”

Silvia Ardagna, head of European economics research at Barclays, said: “Although the latest headline figures show that inflation has fallen due to lower energy prices, the prices of core services and goods remain stubbornly high and continue to constrain real household disposable income and spending.

“The UK economy has escaped a technical recession for now, but the forward-looking outlook remains one in which the economy is likely to stagnate as the impact of monetary tightening will more than offset the relief from lower energy prices.”

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