The news: UK holiday spending is expected to rise 3.5% this year, according to PwC.

• Average spending per shopper is forecast to increase to £461 ($589), up 2.7% from £449 ($573.70) last year.
• Younger shoppers are leading the charge, with nearly one-third of consumers ages 18 to 24 (32%) expecting to increase their holiday budgets this year.

Behind the numbers: The outlook is less rosy than PwC’s report initially suggests. Accounting for inflation—which stood at 3.6% in October and 3.2% in November—sales volumes are likely to be flat or down slightly.

• Nearly three-quarters of shoppers (71%) expect to spend the same amount as last year; in real terms, that implies consumers will be buying less.
• A separate survey from Deloitte indicates that a sizable proportion of those shoppers who plan to increase their holiday budgets are doing so because of higher prices. Additionally, nearly half (48%) of those who expect to spend less cite cost-of-living pressures.

Zoom out: Early spending indicators heighten the sense of uncertainty.

• Barclays reported a 1.1% YoY decline in consumer card spending in November—the biggest fall since February 2021—due to pullbacks in both essential and nonessential purchases.
• However, shoppers turned out for Black Friday and Cyber Monday deals. Online spending rose 4.6% YoY during the four-day period to £3.8 billion ($4.9 billion), per Adobe Analytics, suggesting that discounts are a powerful motivator for cautious UK consumers.

What retailers need to know: The combination of tepid consumer confidence and the rising cost of living is pushing UK households to manage spending more carefully, even during festive periods. That trend is likely to carry over into 2026, putting pressure on retailers to offer clear value to financially strained shoppers.

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