Today’s Bank of England data showed a shift away from credit card spending to higher saving (among those who can).
Karl Thompson, economist at the Centre for Economics and Business Research, said:
While soaring inflation has likely driven many households to resort to credit in order to finance essential spending, the latest figures suggest that rising interest rates have acted to disincentivise borrowing and drive higher savings, among those who can. Indeed, new savings reached their highest level in over a year in September.
Savings showed a notable uptick in September, with households depositing an additional £8.1bn with banks and building societies last month, up from £3.2bn in August and marking the highest figure since June 2021.