October 20, 2020

Chart of the Week: Record rates of household saving point to upside risks through next year

by Fathom Consulting.

In the early days of the pandemic, Fathom advocated that substantial fiscal support packages be put in place to support firms and workers affected by the necessary public health response to COVID-19. By and large governments, particularly in the developed economies, have delivered up to now. With identified cases rising rapidly, many countries in Europe have started to reimpose restrictions on economic activity, albeit at the local rather than the national level. It remains to be seen whether support packages on a par with those seen earlier in the year will be offered. Nevertheless, with government financing costs at record lows, and with reports that a number of vaccines are likely to be available within months, the pressure on finance ministers to extend, or reopen, schemes put in place during the first wave, is likely to prove insurmountable. The downside risks to growth in the near term are, of course, plain to see. Looking further ahead, however, the unprecedented increase in household saving, as major economy governments have used public money to compensate workers for economic activity that has not taken place, suggests there may be upside risks, both to activity and to inflation, through next year.

Refresh this chart in your browser | Edit the chart in Datastream

________________________________________________________________________________________

Refinitiv Datastream

Financial time series database which allows you to identify and examine trends, generate and test ideas and develop view points on the market.

Refinitiv offers the world’s most comprehensive historical database for numerical macroeconomic and cross-asset financial data which started in the 1950s and has grown into an indispensable resource for financial professionals. Find out more.

 

Article Keywords , , ,

Get In Touch

Subscribe

We have updated our Privacy Statement. Before you continue, please read our new Privacy Statement and familiarize yourself with the terms.×