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Daily chart The pandemic is pushing households to conserve their cash

Daily chart
The pandemic is pushing households to conserve their cash

But the new habit may not last for longGraphic detail

Jun 11th 2020

CONSUMERS HAVE been unusually parsimonious in lockdown. In America stimulus cheques arrived in the post in April, contributing to a rise in incomes of 10.5%. But Americans squirrelled away a third of their incomes—their highest saving rate ever. People appeared similarly tight-fisted in Britain, where the amount of cash stashed in bank deposits rose by £16.2bn ($20.6bn) in April, compared with an average monthly increase of £5bn in the six months to February.

With shops and restaurants shut down, some consumers probably had little chance to splurge. Others may have tightened the purse strings after a temporary, or even permanent, lay-off. The collapse in demand probably depressed the inflation rate. Headline figures have fallen, largely because of oil-price declines earlier in the year, which have since been passed on to prices at petrol pumps. But even after excluding energy and food, consumer prices have fallen in America and Japan.Already signed up?Log in

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