The war in the Middle East has dealt a heavy blow to the fragile return of consumer confidence seen in January, according to new data from Barclays. Confidence in the UK, European, US and global economies fell in early March, reversing what had looked like the start of a cautious recovery.
Polling conducted from 3–6 March shows UK economic confidence dropping to 23%, down from 25% at the end of February and below January levels. Four in five consumers are now concerned about the impact of Middle East tensions on fuel, energy and food prices, while 59% worry about the effect on their household finances. Almost half have already taken action — cutting energy use, reducing discretionary spend, delaying major purchases or reconsidering travel plans.
Online retail: small gains despite value-hunting consumers
The shift in confidence is reflected in spending behaviour. Overall consumer card spending rose just 1.0% in February — an increase on January’s 0.8% but still well below inflation. Non‑essential spending reached a six‑month high of 1.8%, though this was driven by shoppers trading down, switching brands and hunting for deals.
Online-heavy categories performed slightly better: general retailers and marketplaces grew 4.6%, clothing rose 3.7%, and pharmacy, health and beauty climbed 6.4%. But these increases reflect consumers’ increasing aversion to paying full price; one in three say they always shop for discounts, and 29% are maximising loyalty points and rewards.
Entertainment and digital content outperform
Digital content and subscription spending saw its strongest month since August 2021, up 12.2%, driven by streaming releases and the rise of new premium subscription models, including AI and fitness apps.
Entertainment recorded an 11‑month high, growing 9.9%. The big driver was online ticketing for live shows and concerts, up 14%. The spike peaked on 30 January when tickets for Harry Styles’ “Together, Together Tour” went on sale, highlighting consumers’ willingness to splurge on memorable experiences even as they cut back elsewhere.
Economists warn rising uncertainty could stall recovery
Jack Meaning, chief UK economist at Barclays, said: “This timely insight into consumers’ reaction to the evolving situation in the Middle East highlights perfectly the economic risks for the UK if the conflict doesn’t find a way to de-escalate in short order. The start of 2026 had brought positive signs of growth and improving consumer sentiment. A new, prolonged, bout of uncertainty risks snuffing that out before it has had a chance to really get going.”
Karen Johnson, head of retail at Barclays, added: “February’s data highlights the careful balancing act shoppers face in navigating rising costs amidst global uncertainty. While we’re seeing a continued appetite to spend on categories such as entertainment and wellness – obtaining value for money and savvy spending will remain a strong focus in the months ahead.”
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