With Brits stashing away cash in fear of further tax hikes under Labour, cutting spending is now the only way forward to grow the UK economy, writes Paul Ormerod

Economic growth has been very low over the past year or so in the UK. A key reason is the reluctance of consumers to spend.

Spending by households account for around 60 per cent of total GDP. So when people save rather than spend, it is much harder for the overall economy to register growth.

The latest estimates from the Office for National Statistics (ONS) show that in the summer the proportion of after-tax income being saved stood at 10.7 per cent. It has been over 10 per cent since Labour came to power in July last year.

To put this in context, in the quarter beginning July 2023 it was seven per cent, and as low as five per cent in July 2022.

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