The Changing Pattern of Savings - speech by Andrew Sentance

Delivering the twelfth RBS Scottish Economics Society Annual Lecture in Edinburgh today, Andrew Sentance, a member of the Bank's Monetary Policy Committee, discusses the implications for growth and inflation of the changing pattern of savings. A common theme he draws out is the potential to rebalance the sources of demand growth, both at home and abroad.
Published on 15 March 2007

He explains that since the mid-1990s UK households have been both purchasing more financial assets and taking on greater amounts of debt. But new borrowing has grown more rapidly, pushing down the personal saving ratio and boosting consumer spending. The inflationary stimulus from rapid consumption growth over the past decade was offset by slack in the labour market in the late 1990s and then by relatively weak growth of investment and exports. But recently some of these factors had become ".less helpful in containing demand and price pressures.".

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