A quick follow-up to this tweet on household wealth. Much of the increase is house prices, but some is still savings - the savings ratio is at its highest since 1962 (1/?)
https://twitter.com/rcolvile/status/1387694951497191424?s=20
A lot of people are expecting/hoping for that cash to come sluicing back into the economy, juicing the recovery. But I'm afraid @CPSThinkTank can offer a warning from history...
As @JethroFElsden showed in his paper 'History Repeating?', on the postwar recovery, the boom in the US wasn't fuelled by people winding down the savings they'd amassed in wartime (because there was nothing to buy/they were in the military)
Instead, after 1945 people (on aggregate) slashed their savings ratio - ie they kept the money they'd saved in the bank, but didn't add to it.
If they act the same way this time, it could have less of an effect than people are hoping, because the savings ratio was already low by historical standards (though not abnormally so)
(Incidentally when the ONS says the savings ratio is at its highest since 1962, it's only because they only started counting then...) 
(The rest of @JethroFElsden's paper is also very much worth a read - details here cps.org.uk/research/histo…)
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