Tuesday, Dec 18, 2007
Saving rates plummet inside the past three months
Firstrung: Alarming shift in Britons' savings ratios - Unbiased.co.uk
In addition to rising borrowing levels, UK savings dropped by over £11 billion in Q3 2007. This means that for every pound UK consumers saved during the third quarter of 2007, they borrowed 35 pence. This is a significant increase from the 13 pence borrowed against every pound in the previous quarter.
Posted by converted lurker @ 12:27 PM (378 views) Add Comment
4 Comments
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1. happyrenterz said...
Not sure how to interpret this data because it is about total amount of money in banks saving accounts. The interest rate has dropped, signalling more cuts to come and probable devaluation of UK pounds. So millionaires might be moving their money out of UK pounds savings. This might not reflect the actions of average people at all.
2. Sold My Soul To The Never Never Never said...
Might be putting it under the mattress - seems safer than leaving it with the Banks!
3. Guiriduro said...
Well, under the older rubric of 30 years ago, higher interest rates would have attracted more savers and dissuaded borrowing, resulting in a net savings going up.
In a society so desperately indebted as the UK of today, with no savings to boost, a higher interest rate merely makes existing loan exposure more expensive and the consumer goes and raids what savings they do have in order to pay down the increase (in fact having any savings at all while you have debt is pointless, but that's the state of british education for you...) In this topsy turvy world, they actually have to reduce interest rates to enable people to get back toward evens... to maybe become savers at some point in the future. But lowered rates turn interest to debt-fuelled consumer spending all too soon after they've done their trick, so wrong headed have expectations become.
Only a depression will restore realism to this exuberant lunacy.
4. enuii said...
Must be all those £2 coins I'm putting in a jar!