British families are saving more than they are borrowing for the first time since records began 22 years ago, according to a Bank of England report
The Bank’s Financial Stability Report found that consumers took out £20bn in new loans but deposited £24bn into bank accounts in the last year.
The culture of austerity is thought to be driven by the nation’s worst recession in 60 years.
Many traditional savings accounts are now offering only up to 3% compared with 5% before the crisis.
Purse strings are also being tightened as job security remains uncertain with some organisations predicting unemployment levels could reach three million over the coming years.
Measures in the Chancellor’s Emergency Budget will mean that household budgets may be squeezed further in the future through higher VAT and income tax levels.
The nation’s thrift-conscious behaviour could have a detrimental effect on the wider economy through lower consumer spending.
© Sky News 25 June 2010
