Recent surveys of UK consumers point to a sharp deterioration in consumer confidence following the outbreak of the war in Iran, with households increasingly worried about the knock-on effects of higher energy prices on their personal finances. Bloomberg reports that consumers are already re-examining their shopping behavior, with big-ticket purchase intent plummeting and saving intention jumping amid concerns over rising fuel costs and looming inflation on essentials like groceries.
Consumer Edge’s UK credit and debit card data suggests that this caution may already be showing up in spending patterns, with a broad-based slowdown in growth across key discretionary categories evident in the weeks following the onset of hostilities. Comparing year-on-year spend growth in the period following the start of the conflict (Feb 28th-March 25th) to year-on-year growth in the YTD prior to the initial strikes:
- Travel saw the sharpest deterioration in growth post-strikes, with YoY growth worsening by ~6 points from -1.7% YTD to -7.4% in recent weeks.
- Leisure and recreation was the second-worst-performing category, with growth falling by 4.5% from -1.6% to -6.1%.
- Luxury and Apparel each worsened by ~3%.
- Limited-service Restaurants and Third-Party Delivery also fell, suggesting that even lower-ticket everyday discretionary occasions are coming under pressure.
- Meanwhile, Grocery showed a slight uptick in growth, perhaps indicating that households are prioritizing essentials and opting to cook at home over eating out.
While the timing of Easter in 2026 may be contributing to spending shifts, most industries are exhibiting a similar deceleration on a 2Y growth basis (i.e. comparing 2026 to 2024), suggesting that the above trends reflect underlying movement in consumer behavior.
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