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Household saving ratio

ended 22. December 2022

The final Q3 GDP data is just out. It showed the household saving ratio increased strongly to 9.0% in Quarter 3 2022, from 6.7% in the previous quarter. Is this a sign that people are trying to store up cash for the turbulent year ahead? Are you seeing any evidence of this? The data also showed that real households' disposable income (RHDI) fell by 0.5% in Q3, the fourth consecutive quarter of negative growth in the RHDI. Any thoughts on this, too, send them across. The deadline is ASAP as this story is BREAKING.

2 responses from the Newspage community

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Editor
Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Such a strong increase in the household saving ratio shows the UK public have reacted to the negative economic news in a very pragmatic way. With the economy worsening and set to implode, it is only sensible that those still in employment are retaining more of their salaries as savings to create a safety net if they lose their job and to protect themselves against rising mortgage rates and household bills. I would hope this ratio continues to increase for several months before the worst of the recession hits, which will mean that it is eaten into for the very purpose it was being saved for, those who become unemployed or who are struggling to pay their bills.
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Editor
Wes Wilkes
CEO at IronMarket Wealth
A surprising yet pleasing increase in the savings rate shows UK consumers have started to batten down the hatches. The post-Covid years have seen an explosion in wage growth and so, despite the fact we’re heading into the most predictable recession in memory, only a 0.5% impact on disposable income gives some room for defensive use of those extra pennies. It looks like the UK consumer has a better handle on things than the Bank of England.