UK credit-card spending defies job-market weakness

Despite the weak global economy and a shaky UK job market, Britons show no signs of paring their credit card spending, according to one of CEIC's most recently added high-frequency datasets, sourced by Fable. This reinforces a relatively positive narrative for the British economy after economic growth was surprisingly strong in February.

This weekly dataset covers both in-store and online payments. It shows that credit-card spending picked up as of mid-March, posting a 5% gain on the month. The first figures for April show only a slight retreat. While UK spending usually rebounds after a post-Christmas lull, it's notable that our credit-card index is well above the equivalent levels seen a year ago.

This indicator has a good track record of providing early signals for the UK consumer more broadly. (As our second chart shows, the correlation has been quite tight since mid-2023.) February retail sales rose at a 1.8% pace year on year; March figures won't be released until April 25.

Meanwhile, employment data showed that UK payrolls tumbled by 78,500 in March. That's the largest drop since November 2020.

The February GDP index added to the muddied outlook for the UK economy. After flatlining in January, growth hit a better-than-expected 0.5% month-on-month pace, boosted by manufacturing. (Some economists speculated companies' customers were accelerating their orders to get ahead of Trump's tariffs.)