Overall card spending in the UK rose 2.1 per cent year-on-year in August, reaching its highest level in 13 months, according to new data from Barclays (LSE: BARC).
The figure builds on two per cent growth recorded in July, with both essential and non-essential spending each rising 2.1 per cent across the period.
Fuel recorded the sharpest increase of any category, with spending up 13.2 per cent as elevated petrol prices continued to weigh on household budgets.
The surge in fuel costs follows disruption to global oil markets triggered by the US-Iran war, which pushed Brent crude to a four-year high of $126 per barrel earlier this year.
Although prices have since eased, a barrel of crude remains above $97, still well above the pre-war level of approximately $70.
Not all categories performed strongly, with home improvements falling 0.9 per cent and department store spending declining 2.2 per cent during August.
Entertainment spending proved a standout bright spot, jumping 7.2 per cent as Britons sought out air-conditioned venues during the summer heatwave.
Barclays pointed to cinema successes including The Odyssey and the new Spider-Man film, alongside bowling alleys, as key drivers of that entertainment rebound.
Travel spending also climbed 3.1 per cent, with more holidaymakers opting for staycations rather than trips abroad during the month.
“Consumer spending and confidence remained resilient in August, even as pressures from the Middle East conflict began to filter into prices,” said Jack Meaning, chief UK economist at Barclays.
Meaning acknowledged the data suggested consumers could “weather the bout” of inbound temporary inflation, but cautioned that “risk remains” if the conflict persists or intensifies.
He warned that should pressures continue to mount, “squeezed households may need to be even more discerning with their spend” in the months ahead.
Household finance confidence edged up to 66 per cent in August from 64 per cent in July, suggesting many Britons feel reasonably secure about their personal financial position.
However, confidence in the broader economy fell to 26 per cent from 30 per cent the previous month, reflecting growing concern about external pressures including persistent inflation and commodity price risks tied to the Iran war.