The prospects for a consumer spending boom after lockdown have been downplayed by a senior Treasury official, amid warnings that wealthier families have saved more than low-paid workers during the pandemic. The bulk of money saved during the pandemic was concentrated among wealthier individuals.
Charlie Bean, a former Bank of England deputy governor who sits on the government’s budget responsibility committee, said it would take several years for households to spend £180bn in extra savings accumulated mainly by retirees and higher-paid workers during the crisis.
He told MPs on the Commons Treasury committee: “The idea that people will make up for lost consumption by spending it all over the next few quarters once the economy has reopened, I find implausible. It is much more likely it’ll be spread out over several years.”
He said as little as 5% of extra savings would be spent each year.
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