By: Muhammad Abdul-Wakeel 

Mubasher: With the stagnation looming over Brexit, resulting in an immense uncertainty, UK citizens are opting for safer investment and saving options.

Other factors also come into play to encourage saving including the increase in wages coupled with a decline in inflation, according to a report by leading data and analytics company GlobalData.

That conclusion is evidenced by the rising of savings ratio to 6.8% in July 2019, compared to 4% in April 2017, the report said.

“It is not surprising that the savings ratio is rising, given UK labour shortages, minimum wage increases, and subdued inflation, combined with low GDP and consumer sentiment. These factors will help consumers save more and pay down unsecured debt that has risen in the last few years,” banking analyst at GlobalData Katherine Long commented.

However, annual percentage rates for all banking products declined by 0.3% in September 2019, compared to the winter of 2018. “This means consumers are receiving a worse deal from savings providers, despite banks gaining through higher retail deposits,” Long noted.

The analyst referred to the shift made by investors toward lower-risk cash individual saving accounts from stock and shares due to the uncertainty of the Brexit situation.

With more clarity on the Brexit front, investors may return to the stock market, but that could take some time, Long maintained.