The unusually low number reflects the increasingly squeezed household budgets in the face of rising prices and declining real wages. People are putting away less for the future and consuming more of current income. The savings data also bear out earlier credit card data. The numbers showed that people were charging larger amounts on their cards, but weren't using their cards more often.The ONS also pulled another surprise. They revised their estimates of the household savings rate back in 2003-4. It appears that UK households weren't saving as much as previously thought. The downward revisions are huge; in some quarters they amount to 2 percent of GDP
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As I posted at S&M on the same topic:
"It's all smoke and mirrors.
If you net off all mortgage debts and cash deposits, you get a big fat nil. The flipside of a credit bubble is a 'deposit bubble' (usually in tandem with an asset price bubble).
The overall savings rate is always close to nil, as some people spend more than they earn and vice versa. You start off with nothing and end up with nothing.
The only sensible measure is the overall earnings level in the economy.
'Wealth' in itself is only the NPV of earnings derived from assets with scarcity/monopoly value + speculative value which is of course of no real value at all as it is not represented by future income that the underlying 'asset' can generate.
Here endeth today's lesson.
Interesting, Mark. Now: who, exactly, has the cash? Is there a reasonably reliable source of information on this?
I think Gordon Brown and his cronies need basic lessons in maths...
They want us to pay more tax, keep spending to keep the economy going, spend more money just getting to work on petrol, pay more for heating and food... and they expect everyone to save for a rainy day and retirement...
It doesn't need someone with A-level maths to see the numbers just don't add up !
I wouldn't trust Gordon Brown to steer a supermarket trolley, never mind "steering the UK through difficult times" !
It was that baffoon that spent money the country didn't have and even the Labour party are in debt up to their ears now... not exactly a shining example of how to run ones finances is he !!!
Sackerson, the consolidated balance sheet of UK banks is here.
If that was your question.
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