British consumers have stopped taking on more debt and started saving their money again, in a sudden reversal of two trends that propped up economic growth in Britain over the last year. If the trend continues — and Credit Suisse analysts Neville Hill and Sonali Punhani told clients recently they believe it will — it will hurt one of the main drivers of GDP growth in the UK: consumer spending.
Since the EU Referendum of 2016, Brits have done two things with their money:
- Go shopping on credit, racking up debt.
- Reduce their monthly saving to historic lows.
That has kept a rising tide of consumer cash washing through the economy.