Barclays reported that UK consumer spending on debit and credit cards dropped by 4.8% year-on-year in December, marking the steepest monthly contraction since January 2021. The bank’s analysis, based on transactions across its UK card portfolio, revealed particularly pronounced weakness in discretionary categories: retail spending fell by 6.1%, restaurants and hospitality by 5.4%, and travel outlays by 7.2%. Barclays economists noted the slowdown came despite promotional holiday offers, and suggested rising living costs and mortgage rate hikes drove households to tighten budgets in the run-up to Christmas. Investors may view this as a warning sign for Barclays’s transaction income and consumer lending divisions, as further spending weakness could weigh on fee generation and credit growth in coming quarters.

Shares of Barclays slipped 2.3% in early London trading on Monday following U.S. President Trump’s Friday statement urging regulators to cap credit card interest rates at 10%. The proposal, if adopted by U.S. authorities, could force Barclays’s U.S. credit card arm to reduce rates on a significant portion of its $25 billion domestic receivables book. Analysts estimate that capping rates at 10% could cut average yields by around 200 basis points, potentially reducing net interest income by up to £150 million annually. The share decline reflects investor concerns over pressure on Barclays’s global credit card profitability and potential regulatory spillover into other markets.