Companies are pessimistic but households are optimistic. This is one possible inference from official figures due to be released next Friday.
These are likely to show that non-financial companies are big net savers, as retained profits far exceed capital spending. In the first quarter (Q1) their net savings were £15bn, or 3 per cent of GDP and the second quarter’s data is unlikely to be much different. Households, on the other hand, are big net borrowers: they borrowed £17.5bn in Q1.
One natural interpretation of this is that companies are so gloomy about the economic future that they are reluctant to invest, while households are so confident that they are willing to borrow. How can we reconcile these contrasting moods?