Overview

• The Office for National Statistics reports that the savings ratio rose to 11.1% in the first quarter of 2024, the strongest level since Q3 2021.
• Real household disposable income grew by 2.5% over the quarter while consumer spending increased just 0.2%, underscoring cautious outlays.
• Households have bolstered their savings in response to Chancellor Reeves’s pledge to exercise iron fiscal discipline and insist every new commitment be fully funded.
• Capital Economics predicts that preserving the Chancellor’s £9.9 billion fiscal buffer may require £13 billion to £23 billion in tax rises in the forthcoming Autumn Statement.
• The Institute for Fiscal Studies warns that Labour has yet to outline how it will fund its manifesto commitments, signaling difficult trade-offs ahead.