CEBR: More saving, less borrowing for economic recovery

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CEBR: More saving, less borrowing for economic recovery

Thu 6th Nov 2008

Consumers in the UK need to turn more to saving and less to borrowing in order to bring about an economic "rebalancing", it has been said.

Economist Charles Davis from the Centre for Economics and Business Research warned that the British consumer is "generally one of the most indebted in the world", adding that savings were negative in the first quarter of the year.

He added that people would need to be "tightening their belts" and should borrow less to fund consumption.

According to the Nationwide Consumer Confidence Index, published this week, consumer confidence rose by four points in October.

It was the first time consumers started feeling optimistic since December last year.

Confidence levels also increased by 23 per cent when the government announced its support of the banking sector.

Last month, the Expectations Index, which demonstrates beliefs of what the labour market and economy will be like in six months, rose by 17 per cent to reach 69.

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