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"British households ran down their savings to a record low at the end of 2016, raising fears that the UK is on course for a fresh consumer debt crisis in the wake of the Brexit vote.
The saving ratio – which estimates the amount of money households have available to save as a percentage of their total disposable income – fell sharply in the fourth quarter last year to 3.3% from 5.3% in the third. It was the lowest since records began in 1963.
"... Martin Beck, a senior economic adviser to forecasting group the EY Item Club, said the falls in savings and disposable income were 'worrying signs' for the health of household finances, not least because inflation is expected to climb higher.
" 'Given that this pre-dates the worst of the inflationary pressures, it provides further evidence that 2017 is likely to be a very tough year for the consumer, with little or no scope to offset the headwinds from higher inflation by borrowing more,' Beck said.
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"Innovations come when governments and businesses are forced out of their comfort zones"
"It would be fatuous to argue that the EU is somehow responsible for the structural defects of British capitalism, because the dominance of finance over industry and the reluctance to invest in new plant and skills has been a feature of the economy for at least a century.
"But at the margin, membership of the EU has accentuated those trends. ... Free movement of labour has allowed employers to meet extra demand by taking on more staff at the minimum wage or just above, rather than by investing. That helps explain why employment is at record levels, but productivity has been feeble.
"The cry from employers now is that curbs on migration will push up their costs and lead to consumers paying higher prices. Actually, consumers are already paying through the taxes that fund the in-work benefits which subsidise poverty wages."