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Brits Draw Down Record Amounts Of Savings To Cover Rising Cost of Living
In the most dramatic evidence yet that Britons are paying for the rising cost of living by raiding savings, Yahoo UK reports that households are pulling money out of their savings accounts at the fastest rate in modern record, according to Bank of England figures. Since the recent recession began, millions of workers have suffered repeated effective pay cuts as inflation has outstripped pay rises, and while consumer spending was one of the main contributors to the sharp rise in gross domestic product in the third quarter, "consumer strength usually reflects increased borrowing but this hasn't been the key factor recently."
In the year to October, the amount of cash in time deposits and cash ISAs fell by 4.7%, while the amount families have in their instant access current accounts or in their pockets rose by 11.2%. This inflationary shift of cash is the biggest since comparable records began in the 1970s.
In the past year, families have withdrawn £23bn from their long-term savings accounts to convert into cash and put into current accounts - the equivalent of around £900 for every household in the country.
It is the most dramatic evidence yet that Britons are paying for the rising cost of living by raiding their savings accounts.
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According to economists, the shift of cash is the biggest since comparable records began in the 1970s, and reverses much of the sharp increase in saving that happened at the height of the recession.
On Thursday, the Chancellor's Autumn Statement is expected to focus on measures to help households deal with the rising cost of living, including energy bills.
Since the recent recession began, millions of workers have suffered repeated effective pay cuts as inflation has outstripped pay rises.
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Consumer spending was one of the main contributors to the sharp rise in gross domestic product in the third quarter, and a further strong increase is implied by the Bank's money figures.
But while the figures suggest that the economy is strengthening, they will also be taken as further evidence that savers are being deterred from putting money aside by record low interest rates.
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Some also suspect that with households still facing a significant squeeze as a result of higher living costs, many are having to dig into their savings in order to afford day-to-day items.
So the UK economy is surging and being lauded as evidence of QE's efficacy but the reality is inflation is eating away at people's wealth and hot money flows have caused the cost of living to rise dragging out the mainstay of future growth - savings - to meet consumption needs today. How long before government inflation data reflects this?
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unpossible.....
indeed, the central bankers already told us that there is "no inflation".
When your income is falling, everything feels like inflation.
When the price of everything is rising (except for your income) everything feels like inflation.
Fixed it for you.
Don't worry, QE money will trickle down. Right after inflation renders it worthless.
I had a dream. All the english speaking people rebelled in their respective countries and overthrew their governments, drawn and quartered the banksters, and elected fair and honest people to represent them and obey their Constitutions. I creamed in my pants, being so happy. Too bad it was only a dream and will never happen...
Brits will just lie down and take anything their government throws at them.
Only once they are completely backed into a corner do they do anything and even then they don't come out the corner swinging they just reappear behind you and stab you in the neck.
That's how they beat the Spanish Armada, that's how they won the Battle of Britain, that's what they did to Gaddaffi when he reached Bengahzi.
Your income is flat or marginally rising, but your dollars are being debauched and destroyed at a faster pace. Problem is not a falling income, but a faster falling currency. Interest rates are the price of money. Compare it to the price of your car..... if your car became worth zero, would you value it? Money is no different.... zero percent interest rates are a value figure placed on money, and since it is sending the signal that money is worthless, asset bubbles are poppinig up everywhere as the liquidity chases yield, causing inflation.
Incomes are not the problem. Debauched currency is.
When interest is artifically low, people are forced to consume the principle.
This is a result of a failed gamble the FED took. Greenspan even said on TV: QE > stoke stawks > lower interest rates > consumer loans increase > consumer confidence increases > spending and economic activity increase = RECOVERY.
Except, he forgot one thing. Every natural course has a natural limit. Zero interest rates and no borrowing is a HUGE signal that the capital destruction from valueless money is not turning on the consumer. In fact, it is turning them away because of the hidden inflation we see today.
QE is a back door bailout of the large banks, but sold to the public as "stimulus". Here we are 5 years on and it's clear who the beneficiaries of QE have been. The only thing that will change this idiotic, failure of a policy is if the people of this country wake up and demand a change.
Problem is the average person is stupid.
When the riots start, people will be more motivated.
When the people are starving, the people will be more motivated.
Riots only start when there are marches for bread.
The UK has a long long way to go before they become Greece.
"Except, he forgot one thing."
Ah, just as the Krel forgot one thing... monsters from the id. Check my avatar to see what is coming.
So, they're pulling money out of savings to cover inflation? are they still buying crap or is it only for necessities?
This is working out well....no depression call until no one has any cash....well played sir
Well they sure as shit ain't gettin their teeth fixed!
yep the donald trump tipex look is awesome
yah - mebbe they just don't trust the feces factory banks with them thar excess reserves...
But I thought pulling consumption forward was a good thing. It can go on forever, right?
depend on how many kids you have and if they speak English or not
I LOVE IT WHEN A PLAN COMMES TOGETHER!
Don't they have Britcoins yet?
Can you redeem Britcoins for dental care? The mind shudders
I always thought there was something crooked about Britcoins.....
What inflation? Outside of food, energy and housing there is very little inflation. iPads are getting smaller and faster... be happy... and give your assets to your masters.
Big screen TVs are cheap in Venezuela. If you can find one.
Remember this story: http://www.zerohedge.com/news/2013-11-23/what-its-be-poor-and-make-terri...
Totally fictional: http://blogs.houstonpress.com/artattack/2013/11/that_viral_poverty_thoug...
I think a large number here caught it out as being fiction.
I started cursing the moment I found out there was a money drive behind the essay. What a crock of shit.
LOL, the Central Bankster criminals are having their lies come back to bite them.
I thought they said inflation was non-existent.
Impoverish the 99% will you to enrich the 1%.
Bernanke and Yellen we know how this ends from history.
They've got to pay for those sets of commemorative royal baby plates somehow.
Fish and SNAP coming to a pub near you.....
Let me say it again bitchez, Northern England checking in here peeps.
Diesel £1.49.99 a Litre, gas and electric charges up 36% in ONE YEAR, 2 liters of milk (just under 4 pints) £1.69.99, ONE packet of 'Turner' rolling tobacco 50g £15.79.99.
Just four off the top of my head things that spring to mind, as each one effects me, as well as others like.
We are all being crucified on the altar of greed here folks. As we enter the holiday season I would urge all of us, those who can anyhow to keep an eye out for older more vulnerable members of our communities, as by the looks of it, they are going to need our help.
Speak American please. How much are things going up ???
Sorry Seasmoke, I keep forgetting that currency thing.
One example is diesel is in your money almost $12 dollars a gallon, (if my math is right).
50 grams of rolling tobacco is $20 dollars more or less.
We are being murdered alive mate. As well as a 36% increase in heating costs for just ONE year.
Brutalisied is better suited I believe.
Sodomized is better suited I believe.
Fixed it for you.
It's about $10 a gallon. That's over double that in the US.
I would be happy to enter into an arrangement with you to exchange physical english pounds for rolling tobacco. I find this amazing as the cost to produce tobacco has made this a break-even effort at best. The pecan and walnut producing property has been great, soybeans too (all things asians love, hhmmmm...)
1 US gal. = 3.8 L
1 lb = 454 gr.
1£ = $1.??
You do the arithmetic. You got gr.5, right?
£1 has gone from $1.52 six months ago to $1.64 today.
Sorry, I gave at the office.
If you quit smoking that would put some of those funny looking L's back in your pocket.
@Inthemix96
Just wait untill after the election..............Tax Rises Galor!
XAU XAG,
Cheers mate, now I feel as depressed as fuck, fuck it, I'll have a few beers and post obscenities on the interwebs.
:-)
Inthemix96
Facts are facts...................UK is BROKE!
You would be better getting an allotment! Or is you have the grounds around your house dig it up and get planting.
Notice they don's build houses with enough ground to feed your self??
Take care ...............and the cold weather going to hit you first ............Just to cheer you up Lol
Oh we are broke mate, well broke, but it doesnt stop the inbred peodophiles from the square mile and the houses of parliament from piling the fucker on even more.
People are wising up fast though, I suppose is some comfort, and a big hearty yes to growing your own my friend, I live in an old pit village and it has been this way, doing it for yourself (as well as others) since jaffa was a tangerine.
Take it easy friend.
What if this is connected to the embryonic bull market in housing, supported by government schemes, which means people are using their savings from the past 5-10 years to finally take the plunge and buy a house, having waiting donkey's years for a house price crash, and now belatedly realising there's a long way to go before the government will be unable to prevent that. In the meantime, it looks as if there's been a massive draw down of savings, whereas the figures for mortgage approvals are the highest they've been since 2007. Even with partial government support for the initial house deposit, that still a lot of 10's of thousands of pounds people are having to fork out to get a house- THAT counts as a savings draw down does it not?
@tsouth
Prob a mixture of both
Draw down to cover in flation and drawdown for other investments rather than sitting getting Zero percent.
The banks lose to much deposit and QE will have to be increased devalueing the £ even more
To the average British voter,if the kids had to be sold to pay for the Sky TV(Premier League football, soaps,X-Factor,Britains Got Talent,Celebrity Come Dancing) subscription,the latest smart phones,the wife and remaining daughters on the game to pay for take aways, White Lightning cider and fags, as long as their house keeps going up in price(not value), they are happy.
The central bankers and politicians know this,if they didn't like being screwed,they wouldn't keep coming back each election time to vote for it all over again would they?
More evidence, if it was needed, tha the EXPONENTIALS are catching up in the economy.
Sorry but you can't have multi year 3%-7% rises in necessities ABOVE INFLATION (utlities, transport, food, accomodation) without something giving.
Expect things to start to bite EVEN HARDER. It's the maths, no escaping that....
On the point of EXPONENTIALS.
I've been waiting for the last few years to see the problem mentioned on the (quality) news or in papers but I've neer seen it.
Nobody seems to believe it in property land, especially London. They all think that property can easily rise by 7-10% ever year FOREVER.
Will some commentator have a) the balls to mention it, or b) even the intelligence to mention it in 2014?
From the country that gave us Keynes...
Sorry to sound like a broken record, but it truly is time for the Sheeple to swap their fake/BS, socio-political models of reality for what's actually happening:
The Feudal Elite are coming back after 100 years. Plan accordingly. "You son of a window-dresser."
I'm also withdrawing savings but not to pay for rising costs of living but to buy assets. Big rotation out of fiat Bitchez!
So this means that ....
The banks are becoming less capitalised ...
meaning lower interest rates are needed ...
which means more withdrawals.
So the crazy idea of punishing savers by zero % interest rates is making tha banks more insolvent, not less.
Masters of the universe? or too much greed?
The price of milk is getting a bit out of hand. I guess the cows are raking it in.
Did anybody here the UK is up for having another country take over and manage it's nuclear industry? Safe as milk! We all cool with that?
It's not over until people strart moving back to the old country. Except they become trapped in the new shithole.
Dont worry: deflation is on the way. LOL
Once they take away your interest income you spend capital..........if they devalue the currency by 30% and slash interest rates to 0.2% on savings and raise energy costs 10% annually it is hard to make it work when wages are frozen or capped at 1%
I've been living in London for the last six months and I'm still shocked at how expensive everything is - and I moved from NY. That being said, I feel like I'm living in a more vibrant economy. I suspect all the building and general activity is fueled by foreign money and Euro flight, but the general feeling seems more like NY in the 80s and 90s.
I wonder if any Brits buried their guns and ammo before that dreadful turn in? Same with the Aussies.
People have finally wised up to the truth that the Cameron govt has failed to keep its promise for savers before the 2010 election. Telegraph article of last week reminds us: http://www.telegraph.co.uk/finance/personalfinance/pensions/10457090/Cam...