Households are pulling money out of their savings accounts at the fastest rate in recent times, according to recent Bank of England figures. It is perhaps the most telling sign yet that Brits are paying for the rising cost of living by raiding their piggy banks.
Over the last year, families have withdrawn £23bn from their long-term savings accounts to convert into cash and also put into current accounts - that's around £900 for every household in the country.
Analysis of the Bank's figures by Sky News shows that in the year to October, the amount of cash in notice deposit accounts and cash ISAs fell by 4.7%, while the amount families have in their instant access current accounts or in cash rose by 11.2%, or £71bn.
This shift of money is the biggest since comparable records began in the 1970s, and reverses much of the big increase in saving that the UK saw during the credit crunch (in the year to October 2009 the amount put into long-term savings rose by £13.9?billion).
Today of course, the Chancellor's Autumn Statement is expected to focus on measures to help households deal with the rising cost of living, including energy bills.
Since the recent recession began, many workers have suffered significant real terms pay cuts as inflation has risen faster than wages. And as well as covering rising living costs, it is thought that the gobbling up of savings has contributed to consumer spending and therefore recent economic growth.
Indeed, consumer spending was a key contributor to the increase in GDP in the third quarter. But that in turn must raise fears over the sustainability of the UK recovery. A more broad-based recovery, with higher levels of investment, was what the government was hoping for this time round.
Rather we now appear to have another consumer-led boom fuelled by running down savings, and in the near future another possible house price boom (stoked by Help to Buy). Here we go again?
The run down in savings also suggest savers are being deterred from putting money aside by record low interest rates. According to the Bank, the average interest rate on long-term savings accounts has now dropped to around 2.4%, the lowest level since comparable records began in the late 1990s, in the wake of the government's Funding for Lending scheme last year.
This was supposedly designed to provide cheap funding for high street banks in the hope that they in turn would lend the money out to business. That hasn't really happened but rather went into mortgage lending, with a further house price stimulus now here in the form of Help to Buy. Funding for Lending has now been re-targeted at helping businesses, which was what it was supposedly set up for in the first place.
What's clear is that at some point interest rates will rise as recovery takes hold and unemployment falls. That in turn will encourage more saving and perhaps less of a consumption binge orientated recovery.
But as rates rise measures are needed to make sure that small businesses in partiucular can access to finance at affordable rates. Indeed, recent figures have shown that lending to small businesses contracted, leading the employers' group the CBI to call for new ways of funding small businesses, while the manufacturers' body the EEF demanded more competition in banking.
The government could have been using the last three years to rewire the financial system in exactly this way so as to provide a more sustainable platform for making goods and services rather than us buying things (consumption). It hasn't, and we're not really seeing a rebalancing of the broader economy.
We all welcome the encouraging signs of recovery, but given the latest savings figures questions remain over how sustainable this in the long term. Plus ca change?
* Professor David Bailey works at the Aston Business School and writes a column for the Birmingham Post
