MNI BRIEF: UK Household Savings Ratio Falls in Q3

UK households’ saving ratio stood at a preliminary 9.5% in Q3, the lowest since Q2 2024 and down from 10.2% in the three months to June, the Office for National Statistics said on Monday.

The contribution of pension saving increased to 4.6 percentage points, while non-pension saving contributed 4.9 percentage points, down from 5.8 percentage points in the previous quarter.

Final consumption expenditure grew by 0.9%, down from growth of 1.0% in the previous quarter, driven by increases in spending on transport, food and non-alcoholic beverages, miscellaneous goods and services as well as clothing and footwear. (See MNI INTERVIEW: UK Consumer Savings Still Drag on Economy- ONS )

Earlier this year, Bank of England Governor Andrew Bailey said "the saving ratio remains notably above pre-pandemic levels, and we have for some time been expecting it to decline and support consumer spending". However, the latest data offers no evidence as to whether Q3’s decline is based on higher spending or is a response to lower  disposable income as income and wealth taxes rise.