. Britain's statistics office estimated on Monday that around 77pc of this was "forced" saving during lockdowns. This equates to around 13pc of annual household disposable income. However, Ashley Webb, an economist at Capital Economics said much of this was unlikely to be spent. He said the Bank of England data 'suggests that households are becoming more cautious as the economic outlook deteriorates. This suggests that households may not dip into their savings to support spending, which is an extra downside risk to our forecast that the economy is heading for recession'. Martin Beck, chief economic adviser to the EY ITEM Club, said the data pointed towards 'a household sector that is low on confidence and either unable, or unwilling, to borrow more and save less to try to push back against the squeeze on real incomes'. In better news for savers, average interest rates paid on new fixed-rate bonds r){kind=link}
Families stashed away an extra £8.1bn in September
Households stashed more money into savings in September than in any month since lockdown ended, in a sign that nervous consumers will not help the UK to spend its way out of recession.
Families put an extra £8.1bn into banks and building society accounts in September, according to Bank of England data. This compares with a £3.2bn rise in August and also represents the biggest increase since June 2021, which was the last full month before Covid restrictions were completely lifted in England.
It also compares with an average monthly rise of £4.6bn during 2019, before the pandemic hit.
The data showed households are leaving most of the extra cash in their current accounts, suggesting they want to have ready access to cash. The amount in accounts paying zero-interest rose by £4.1bn in September, following a £1.6bn increase in August.