The household saving ratio climbed to 12.0% in Q4 2024, up from 10.3% in Q3, with significant contributions from both non-pension and pension savings. Excluding pandemic effects, this is the highest ratio since Q1 2010. Experts attribute the increase to improved earnings outpacing inflation, indicating households are preparing for upcoming economic challenges. Despite rising savings, concerns persist about consumer spending and economic growth, as the consumer sentiment remains shaky, influenced by historical economic crises.
This is clear evidence that 'the cost of living crisis' is over, at least for now.
With levels of savings now at the highest level since the Global Financial Crisis, the consumer is at maximum uncertainty.
The fact that people can save more is good news about disposable income levels.
Both benefits and earnings increased above the rate of inflation and households have often had a surplus.
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