Yesterday, the ONS released their latest estimates for first quarter national accounts. The household savings rate number was a real shocker. It came in at just one percent.
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