On the savings side the issue multi-parts but all indicate one problem. First, savings are rising. Second, savers are intensely risk-averse. Third, savers can find nothing better than cash or gilts to save in right now, despite the incredibly low interest rates. And, fourth, those same low rates are not encouraging business to do anything more than refinance existing debt or fund losses. Actual job-creating investment in real activity is virtually non-existent.
Business investment seems to be running at £50 billion a quarter. That’s:
Business investment is a component of gross fixed capital formation (GFCF) by the private sector and public corporations, excluding investment in dwellings and costs of ownership transfer. It is a UK construct and not internationally comparable.
It also doesn’t include any buying of financial assets. Now, mebbe £200 billion a year ain’t enough or summat but it’s not nuttin’.