Barclays bank issues warning to anyone with a debit or credit card

The high street bank has issued a warning to anyone with a debit or credit card after spending slowed in May. Barclays’ research also highlights growing concerns about ‘shrinkflation’

A line of five men, all dressed in dark coloured clothing, who are waiting in a socially distanced queue outside a branch of Barclays Bank in Beckenham, South East London / Kent. Face coverings are being worn in various ways! Autumn 2020, during the coronavirus pandemic.

Barclays has issued a warning(Image: whitemay via Getty Images)

A warning has been issued by Barclays to its debit and credit card holders, as spending slowed down in May. The bank, which competes with NatWest, Nationwide, Lloyds Bank, HSBC UK, TSB and Santander, reported a mere 1.0% year-on-year growth in consumer card spending in May, a significant drop from April’s 4.5% growth.

This growth rate also falls short of the latest CPIH inflation rate of 3.5%. According to Barclays, consumers are “cutting back” due to declining confidence in their personal finances. The confidence in household finances dropped by three percentage points to 67%, while the ability to spend on non-essential items decreased by four percentage points to 56%.

Discretionary spending saw a modest 2.0% increase, which is considerably lower than the 5.1% recorded in April, with nearly half (46%) of UK adults intending to reduce their expenses.

Barclays’ research also highlights growing concerns about ‘shrinkflation’ (up four percentage points to 82%), ‘streamflation’, and interest rates (up three percentage points to 64%).

Karen Johnson, Head of Retail at Barclays, said: “Consumers are clearly becoming more value-conscious as financial pressures persist, but they’re still finding joy in the everyday – whether that’s a small treat, a cinema trip, a garden project, or a carefully planned getaway.”

Ms Johnson pointed out, “The double bank holidays in May and record sunshine will have given non-essential spending a helpful boost, but this was largely outweighed by the rainy weather in the second half of the month, while longer-term uncertainty continues to shape how and where people choose to spend.”

Meanwhile, the comprehensive Barclays Consumer Spend report blends heaps of customer transactions with consumer research to offer a deep insight into UK spending, reports Birmingham Live.

Source link