UK consumer spending falls for first time since 2024 as Iran war bites

UK consumer spending fell in April, the first annual decline since November 2024, as fear of the Iran war pushed households toward saving and away from discretionary spending. Barclays card spending slipped 0.1% year‑on‑year (reversing March’s +0.9%), while the BRC reported total retail sales down 3.0% and like‑for‑like sales down 3.4%. Travel and big‑ticket items were weakest (Barclays travel card spending -5.7% y/y). Analysts warn the data sharpens expectations for Bank of England easing and could put modest downward pressure on sterling, while weighing on sectors exposed to discretionary demand such as airlines, hotels and furniture retailers. If Middle East uncertainty persists, the demand shock could be sustained, reinforcing a stagflationary narrative of energy-driven inflation eroding real incomes even as activity cools.