UK consumer card spending experienced its sharpest drop since early 2021 in November, with households cutting back at the fastest pace in almost five years. According to data from Barclays, card spending fell 1.1% year‑on‑year, as shoppers delayed Christmas purchases amid uncertainty surrounding the government’s budget. While Black Friday delivered a temporary boost, with transaction volumes were more than 60% higher than an average day, retailers still reported weaker‑than‑usual seasonal momentum. The figures highlight growing consumer caution as higher living costs and economic uncertainty continue to weigh on household confidence.
According to data from Barclays, card spending fell 1.1% year on year, as shoppers delayed Christmas purchases amid uncertainty surrounding the government’s budget
Expectations around UK monetary policy have firmed in recent days, with markets now pricing in a very high likelihood of a 0.25 percentage point rate cut next week. That confidence strengthened further after senior Bank of England officials appeared before the Treasury Select Committee on Tuesday, where they offered fresh commentary on the November Monetary Policy Report. Deputy Governors Dave Ramsden and Clare Lombardelli, along with MPC member Catherine Mann, signaled that while inflation risks remain, the economic outlook is broadly in line with forecasts and the gradual removal of policy restraint is appropriate. Their remarks reinforced economists’ consensus that the Bank is preparing to lower rates, even as divisions within the MPC suggest the decision could still be finely balanced.
Expectations around UK monetary policy have firmed in recent days, with markets now pricing in a very high likelihood of a 0.25 percentage point rate cut next week.
Across the pond, the US Federal Reserve has cut interest rates by 0.25 percentage points, marking its third consecutive reduction this year and bringing the benchmark rate down to a range of 3.50%–3.75%, the lowest level in nearly three years. The decision reflects a balancing act between slowing job growth and inflation that remains “somewhat elevated.” Fed officials were split, with dissenters arguing both for a pause and for a larger cut, underscoring the uncertainty surrounding the US economic outlook. Markets reacted positively, with major indices rallying as investors priced in the prospect of easier financial conditions heading into 2026.
Our specialist's final thought
"Despite the weaker data, the reading came in higher than analysts’ expectations of 50.5 and, with the budget now in the rear-view mirror, traders took a positive view of the data and both sterling and the domestically focussed FTSE 250 Index strengthened in the latter part of the week."
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