By Simon Whitaker of the Bank's Structural Economic Analysis Division.
The level of national saving is important for policymakers as it can contain information about future prospects for growth and inflation. This article starts by comparing the current level of saving with a simple benchmark. However, this benchmark ignores important issues such as the relevant measure of saving and capital and the ability to borrow from overseas. The article considers how various measurement issues and economic shocks could allow the level of saving to differ from this benchmark, and also looks at the outlook for national saving in the medium term.