We recently wrote about the UK household savings ratio falling to a record low of 4.9% in 2017 (since comparable records began in 1963) as growth in households’ spending exceeded the growth of households’ income. (Read more here).
![Households saving ratio, seasonally adjusted](https://thistimeitisdifferent.com/wp-content/uploads/2018/03/Households-saving-ratio-seasonally-adjusted.png)
We also wrote about the household savings rate in the US falling to a multi-year low of 3.1% as household expenditure grew quicker than income (Read more here).
![US Personal Saving Rate February 2018](https://thistimeitisdifferent.com/wp-content/uploads/2018/04/US-Personal-Saving-Rate-February-2018.png)
And it appears the same is happening in Australia and Canada as well.
![Australia Saving Ratio, Source: Reserve Bank of Australia](https://thistimeitisdifferent.com/wp-content/uploads/2018/04/Australia-Saving-Ratio.png)
![Canada Household Savings Ratio](https://thistimeitisdifferent.com/wp-content/uploads/2018/04/Canada-Household-Savings-Ratio.png)
Spending is outpacing income, household debt is at an all time high and interest rates are at an all-time low. What would happen if interest rates were to rise significantly or if the economic conditions like record unemployment to reverse?