DOWN: Household saving ratio and disposable income

Households are saving less because the squeeze is still on. The fall in the household saving ratio, driven by non-pension saving, strongly suggests people are running down cash buffers — or simply cannot add to them — rather than building precautionary savings. Inflation is, at its core, a loss of purchasing power in the currency, and ‘sticky’ inflation means that even when headline figures improve, households still feel the steady erosion of what the pound buys in everyday life. That discourages traditional saving and forces more ‘survival’ choices: spending a greater share of current income because spare cash is being diluted in real terms. From a debt-cycle perspective, it also fits with tighter cashflow conditions: when servicing costs, job insecurity and weak growth bite, the release valve is often a reduction in discretionary saving. In short, this looks less like renewed confidence and more like stress in the system.