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UK household saving ratio hits record low in 2017, says Office for National Statistics UK household saving ratio hits record low in 2017, says Office for National Statistics
(35 minutes later)
The share of income that UK household's save hit its lowest since records began in 2017, as expenditure outstripped inflation-eroded pay. The share of income that UK households save hit its lowest since records began in 2017, as expenditure outstripped inflation-eroded pay over the 12 months.
The Office for National Statistics reported that the full year household "saving ratio" was just 4.9 per cent in the year, down from 7 per cent in 2016  and the lowest readings since the series began in 1963. The Office for National Statistics reported that the full year household “saving ratio” fell to just 4.9 per cent in the year, down from 7 per cent in 2016  and the lowest readings since the series began in 1963.
Overall GDP growth for the final quarter of the year was unrevised by the ONS at 0.4 per cent. Total incomes grew by 3.5 per cent, while expenditure was up by 3 per cent.
Inflation spiked to above 3 per cent in 2017, mainly due to the slump in the value of sterling in the wake of the June 2016 Brexit vote.
Average real wages began falling in April, although there are indications that pay growth is now rising above the cost of living again.
There have been concerns from regulators and campaign groups that many households have been dipping into the savings and increasing their debts in order to make ends meet.
Separately, the Bank of England reported on Thursday that the annual growth rate of unsecured consumer credit ticked up again to 9.4 per cent in February. Within this, credit card borrowing rose 9.6 per cent.
“Household spending power has been flat-lining for the last two years. That has forced consumers to run down savings and borrow more just to sustain sluggish growth in spending,” said Ian Stewart, and economist at Deloitte.
Overall GDP growth for the final quarter of the year was confirmed by the ONS at 0.4 per cent, unrevised from the agency’s previous estimate and down from the 0.5 per cent rate recorded in the previous quarter.
The quarterly growth rate was lower than the 0.6 per cent recorded in France, Germany and the US, although in line with Canada and Japan and higher than Italy’s 0.3 per cent.
But the ONS also noted that the UK was the only G7 country to see a slowdown in its annual GDP growth rate in 2017, suggesting Britain is benefiting less from the synchronised global economic pick-up than others.
Full-year UK GDP growth was 1.8 per cent, the lowest since 2012.
Per capita, national income grew by only 1.2 per cent.