Spending up more than 4%

Data from the Barclays Consumer Spend ​report showed overall spending was up 1.6% while for non-essential items, it was up 1.5%.

However, restaurants again experienced a downturn in spending, falling further into decline, down 13.1% (compared to 12.6% in the previous period).

This came as almost half (49%) of Brits raised concerns about how much they spend on food and drink with the same proportion (49%) making the effort to cut back on discretionary spending.

Of this group, most were spending less on dining out and ordering takeaways (both 54%) while a quarter (24%) said they were reducing coffee or drinks subscriptions.

Elsewhere, spending on entertainment was up 3.2% last month, fairly similar to March (3.1%) as families spent on leisure during half-term.

Improving confidence

Moreover, despite the overall spending growth slowdown, consumer confidence in managing household finances reached its highest level since November 2021 at 71%.

Furthermore, confidence in their ability to spend more on non-essential items was up marginally from 55% in March to 56% in April.

Barclays head of retail Karen Johnson said: “Retailers were hopeful discretionary spending would bounce back by mid-year, buoyed by falling inflation and the prospect of better weather.

“While improving customer confidence offers a ray of hope for the retail and hospitality industries as the summer season approaches, many retailers have adjusted their expectations, anticipating no real recovery until the autumn.”

In terms of housing costs, the report found UK spending on rent and mortgages increased by 3.6% in April, ending the three month slowdown in spending witnessed from January to March.

However, growth remained below February (4.7%) and under the 12-month average (6.5%) indicating costs were heading in the right direction over the longer term.

Looking ahead

Consumers and lenders are anticipating a drop in interest rates this year, according to Barclays head of savings and mortgages Mark Arnold.

He added: “But optimism is understandably tentative as the market is still feeling the effects of last year’s volatility.

“Our data shows Brits are still facing higher rent and mortgage payments, although costs are still slowing down over the longer term.”

This optimism for the coming months was shared by Barclays UK chief economist Jack Meaning.

He said: “With inflation expected to have dropped back to 2% in April and with many anticipating a boost from the national living wage increase​, it is encouraging to see consumer confidence picking up.

“Given the long squeeze consumers have faced, it may take time for this to translate into stronger discretionary expenditure but easing interest rates in the second half of this year should spur consumers’ confidence and spending.”

The previous month (March) reported an overall rise in consumer spending​ of 3.2% thanks to FA Cup fixtures, the Six Nations tournament and St Patrick’s Day celebrations.