A further mitigating factor is that household savings rates appear to have risen, involuntarily and significantly, due to social distancing policies. A Bank of England survey in conjunction with Ipsos Mori suggests the aggregate saving ratio is broadly unchanged, although with considerable heterogeneity across income cohorts (Chart 12). But it is possible these survey respondents did not capture the involuntary increase in households’ cash balances when they answered questions about their savings behaviour. 14 15  Haldane (2020). Hicks (1950). 13  All speeches are available online at www.bankofengland.co.uk/speeches  13  For example, sterling deposits held by households and companies in banks have increased sharply over the past few months, by around £ billion (Chart 13). That is consistent with a significant rise in the saving ratio. These higher involuntary savings could be drawn down to finance future spending, at least by some households. In aggregate, they potentially dwarf any voluntary rise in savings for precautionary purposes. Chart 12: Saving rates by income (net balance) Net balance increased savings (%) 25 20 15 10 5 0 -5 -10 -15 Up to £  £  £ - £  £  Sources: Ipsos Mori and Bank calculations. Notes: Research was carried out by Ipsos MORI on behalf of The Bank of England. It surveyed a nationally representative quota sample of 2,243 adults in the United Kingdom aged 16-75 using its online i:omnibus on 29 May to 3 June.
And perhaps as many as 8 million employees are working fewer hours for a variety of reasons.8 Taken together, this means that perhaps as much as half the UK workforce is currently either unemployed or underemployed. This, too, has no historical precedent. 5  ILO (2020a). ILO (2020b). 7 The total number of jobs furloughed may not equate to the number of employees still under furlough. For example, some workers may have more than one job. And some jobs may only have been furloughed temporarily. 8 May MPR: “Those that remain in work may be working fewer hours than normal. This could be because of reduced demand for their services, in which case they will have spare capacity. But they may also work fewer hours because they fall ill, are required to self-isolate, or have extra non-work responsibilities, such as caring for relatives or home-schooling children.” The Ipsos Mori survey in the May MPR suggested around 25% of employees are working fewer hours. 6  5  All speeches are available online at www.bankofengland.co.uk/speeches  5  In its May Monetary Policy Report (MPR), the MPC produced an illustrative but plausible scenario for the UK and global economies. In this scenario, UK-weighted global GDP was expected to contract by 26% between the fourth quarter of 2019 and the second quarter of 2020 and by 13% over the course of 2020. For the UK, the equivalent numbers were a peak-to-trough contraction of 27% and an annual contraction of 14%.