Can household surveys help to maintain the fall in the savings ratio?

The past two years have seen some uncharacteristically large errors in the prediciton of aggregate consumption-the worst since 1975 though in the opposite direction. The official forecasters in HM Treasury and the independent forecasters at the London Business School (LBS) and the National Institute for Economic and Social Research have all been equally wrong, as Table 1 shows. The errors for 1988 are especially large, and compare with average absolute forecasting errors for consumer spending of one per cent in recent years. The problem has been a sudden and unexplained fall in the savings ratio of the personal sector.