Inflation
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of inflation on household savings rates in the last five years.
Answered by Rachel Blake
The government monitors developments in inflation and household saving through data published by the Office for National Statistics. Inflation can affect household saving behaviour through a number of channels, including its effect on real incomes, interest rates and confidence.
The household saving ratio was 9.9% in Q4 2025. This is slightly above the long-run average saving ratio since 1970, of 9.3%. Inflation was unchanged at 2.8% in May, having fallen from a peak of 11.1% in October 2022. The Government understands that higher inflation in recent years has added to household living costs, especially through the price of everyday essentials such as food and energy. The Monetary Policy Committee at the Bank of England has responsibility for controlling inflation, and the Government fully supports the action it is taking to sustainably return inflation to the 2 per cent target.
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