Sky News business presenter Emma Crosby

More official data today reconfirming fears that the UK economy is slowing. Growth for the first three months of this year has actually been revised down to 0.3%. If it keeps going at this pace then the government's forecast in the March budget of 1.75% to 2.25% will be blown out of the water.

Buried in today's data is something even more interesting and also worrying. We saved just 1.1% of our incomes in the first 3 months of the year - the the lowest figure since 1959.

Think of 1959 and you might recall it being the year that Fidel Castro was sworn in as Cuban leader, Buddy Holly died in a plane crash, and at home the first section of the M1 opened. It was also a time when the UK was recovering from post-war austerity and had yet to enjoy the economic boom of the swinging sixties.

Is there much correlation in household budgets between 1959 and 2008? Not really. We have an awful lot more money to spend than we did back then. What's startling though is the current declining rate at which households are able to save money. In the past two years it's been shredded from 6% to 1.1%. And one of the main things to thank for that: Inflation.

Oil at record highs of more than $140 per barrel and food inflation running at an extra £1000 per household per year. So it's no surprise that the supermarket giants have engaged in a fierce price war this weekend to cling onto customers.

But it is a real worry that there's no money left at the end of the month to put in the piggy bank. For the past decade its been spend, spend, spend largely on credit cards and not much saving for a rainy day. Well it's looking pretty drizzly outside, we've no savings to fall back on, and because of rising prices there's not much cash left to start saving if we wanted to. This of course in complete contrast to Asian countries who have been squirreling away cash for a long time now.

How concerned are you? What's the remedy? Let us know your thoughts?

Comments

[Khalid 27 Jun 2008 15:24:48]

Emma
Thus far as supermarkets are concerned, it is a fact that they throw away vast amounts of food, which could be otherwise utilised, yet it is the humble shopper that ends up paying through the nose.
Indeed fuel is a major factor, and as such I wont at this stage add fuel to the fire but say this, prudent spending should come natural to all households and unless we all bring these so called super markets to tow the line, then that will be the just deserts as many a small business has suffereed because of many a council being biased towards mega bucks and rely upon environmental drivel.
What will these councils do when the supermarket decides to pull out of the are? Will they then offer the small business the same business discounts they currently offer the large business? No, I didnt think so.
Any way, when has anything that has been forecast come to fruition in a positive manner?
Week in week out the small fish are pounded beyond belief, however, there lies an underlying warning that there will come a time that small becomes big. So, if the piggy bank is empty, fear not, soon it will be full? UK probelms arose when we became entangled with EU nonsense and shall continue to do so until such a time that [Someone Somewhere] takes a grip of those [Simple Minds]

[Michael Cornwall 27 Jun 2008 12:39:38]

Yes concerned.
I actually thought what you said this morning that Aldi had increased sales by 5% over the last month was the most relevant to me.I try to give you an idea of real life here in Cornwall. My feelings are from selling in my own shop and speaking to people is that there is definitly a big shift to down price everything. In my shop at the moment I am twice as busy as last year because I am known for cheap price,whether I survive is a different matter.
I just want to keep you in touch with life here . I spoke to Karl Laroche,who fishes out of St Ives.He has fished for 26 years there He catches lobster,crab,mackeral,and sea bass.Fresh Cornish sea bass is superb Emma.lightly grilled with seasoning. Karl fishes from a 19ft. cygnus with his mate .His usual day is up at 2.30am at the boat by 3. out to sea by 4 yesterday he was back home at 11pm. on that day they both took £100 each. the boat got £45. The rules and regulations make it hard to,earn more so they work long hours .His fuel costs have gone up from £80 a week to £240. His bottom line is being squeezed by the fuel,with no chance of increase. The chancellor and the rest of these policy makers do not know the real aspects of hard life.I think the elections last night told them, what we think of them. Not a lot.