Caution Reigns as U.K. Consumers Repay Loans, Add to Savings
Britons remain cautious about splashing out following the lifting of pandemic restrictions, figures published Tuesday show.
Consumers repaid unsecured debt in July for the first time in five months and households banked an additional 7.1 billion pounds ($9.8 billion) in deposits, well above the pre-pandemic average.
“Caution prevailed at the end of social restrictions (‘Freedom Day’) in mid-July, instead of a spending splurge being unleashed,” wrote Sandra Horsfield at Investec in a note Tuesday. Excess savings climbed to 148 billion pounds, she estimated.
Bank of England officials are relying on consumer spending to sustain the economic recovery from last year’s pandemic-induced slump, with the central bank anticipating households will run down around 10% of their additional savings.
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