Britons save more as consumer confidence wanes

by Gill Montia

Story link: Britons save more as consumer confidence wanes

Britons have been saving more since the end of last year, prompting fears that a downturn in consumer spending will cause a slowdown in the economy.

Official figures show that growth in consumer spending fell to a two-year low of 0.1% in the fourth-quarter of 2007.

The level of growth was around half that forecast and compares with 0.8% in the third-quarter of the year.

Meanwhile, the savings ratio, the official measure of how much households put aside, rose in the final quarter of last year, to 3.3%.

The ratio is a measure of national disposable income against consumer spending and while it was up from 2.6% in the previous three months, it remained relatively low.

The downturn in consumer demand came despite a rise in households’ disposable incomes to 1.3% in the fourth-quarter of last year, giving an average annual rise of 2.6%.

According to a GfK NOP poll, in the last three months of 2007, consumer confidence stood at its lowest level since February 1993.