Consumption has climbed to new highs as a share of demand in recent years, even though the share of income going to workers has fallen. While this can largely be explained by the effects of population ageing rather than a change in savings behaviour, working households have started to save less more recently. This could continue somewhat further, but working households will likely want to maintain high savings rates to fund retirement. A pick-up in wage growth will therefore be required to maintain the recent strength of consumption.
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