- Credit and debit card purchases slowed down in the week to 12 May, according to numbers from the ONS.
- The high inflation rate has pushed up the prices for most things, forcing millions to cut expenses.
High inflation has forced UK households to pay significantly more than they did last year for the same products and services. As a result, people are slashing spending as earnings have failed to grow as much as the expenses. This is also reflected in the figures for consumer spending on credit and debit cards, which slowed down last week, according to the data shared by the Office for National Statistics.
The data, released on Thursday, showed that the card purchases in the week to 12 May declined by six percentage points over the previous week, which had received a boost from public holiday spending.
When compared with the same period in the last year, the spending was 7 percentage points higher. On the other hand, it was 4 percentage points higher than the pre-COVID-19 period.
©2022 Kalkine Media®
Image description: Credit and debit card purchases in the week to 12 May declined by six percentage points over the previous week.
Besides using credit and debit cards, people also reduced their outdoor visits as OpenTable seated diners saw a decrease of 10 percentage points, while the visits to 'retail and recreation' fell by 3%.
In the wake of the latest developments, let us take a look at two banking stocks and analyse their investment prospects.
Barclays Plc (LON: BARC)
Barclays is a British banking major with operations in several countries. It is Britain's third-largest bank by market value and is listed on the FTSE 100 index. On Wednesday, Barclays announced that it has almost doubled its stake in Australia-based investment bank Barrenjoey Capital Partners, from 9.9% to 18.2%.
The current market capitalisation of Barclays Plc stands at £26,025.97 million. Over the past one year, the share value has plunged by around 14%, and the year-to-date (YTD) return stands at -18% at present.
Barclays' shares closed down by 1.24% at GBX 153.28 on 19 May 2022.
NatWest Group Plc (LON: NWG)
The British banking and insurance giant offers multiple financial services like personal and business banking, insurance, and corporate finance. It posted a 40% jump in first-quarter profits, beating expectations with pre-tax profits of £1.2 billion.
The bank was in the news recently after thousands of its customers reported that their accounts were charged twice for purchases. The bank acknowledged the mistake, saying there was a payments glitch that caused the issue.
In March, the FTSE 100 constituent announced that it would repurchase shares worth £1.2 billion from the UK government to retain majority ownership after 14 years.
Shares of the company closed 1.18% lower at GBX 209.10 on 19 May 2022, with a market cap of £22,208.15 million. The stock has given a return of over 5% to the investors over the past one year, while the YTD return stands at -7.5%.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.