Abstract
▪ Our analysis of sharp shifts in savings rates over the past half‐century supports the brisk pace of consumer recovery that we assume in our baseline growth forecast. ▪ But given the scale of the recent build‐up of household savings, the odds of a faster rebound in consumption are relatively high. Our study suggests that larger rises in savings means faster subsequent unwinding. ▪ Overall, around 1‐in‐4 previous episodes have seen a faster unwind of savings than in our baseline. In particular, periods of robust growth have been associated with especially rapid falls in savings rates.
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