Household budgets are showing signs of strain after it emerged Britons saved the smallest slice of their incomes since early 1960.
The Office for National Statistics (ONS) said its household savings ratio – the proportion of disposable income not spent – fell to 2.1% in the first quarter of 2007, compared to 3.9% in the previous quarter.
The figure, which represented the lowest savings ratio since the first three months of 1960, came after a surprise hike in interest rates in January, following two previous increases in August and November.
While consumption was reasonably strong in the first quarter, analysts said the pressure on savings suggested that spending could now start to slow.
Britons ‘saving least since 1960’