By Angela Monaghan
It says in its latest Quarterly Bulletin that household decisions to spend or save will have major consequences for the economic outlook, because consumer spending accounts for two-thirds of total spending in the UK.
"Any attempt to reduce consumption is likely to push down on output and hence household incomes. That could actually make it harder for households to increase their savings – known as the paradox of thrift."
The Bank says that even if households saved as much as 10pc of income, it would take nine years to bring wealth back up to the average of the last 20 years.