Barclays released debit and credit card transaction data showing UK consumer spending fell by 7.2% in December compared with the same month in 2022, marking the steepest annual drop since January 2021. The bank processed £18.4 billion of card payments in December, down from £19.8 billion a year earlier. Barclays economists attributed the decline to rising energy bills and persistent inflation, noting that discretionary categories such as dining out and leisure saw a 12% year-on-year reduction in spend. This trend intensifies household caution heading into 2024, with the bank forecasting UK GDP growth of just 0.5% for the first quarter.

Barclays shares fell 3.5% on Monday after former U.S. President Donald Trump called for capping credit card interest rates at 10%, a proposal that analysts warn could hit the bank’s U.S. card business. Barclays Bank PLC’s U.S. division generates approximately £1.1 billion in annual net interest income from consumer lending. If enacted, a 10% cap could reduce Barclays’ card interest margin from its current 15.8% average to around 8.5%, shaving an estimated £150 million from annual profits. Investors are now reassessing the risk profile of Barclays’ transatlantic operations ahead of potential regulatory developments in Washington.