ECB sees no consumption boom as rich have most of the savings

FRANKFURT, Nov 02 (Reuters): The euro zone is unlikely to see a new boom in consumption as savings accumulated during the Covid-19 pandemic are largely held by the richest households, the European Central Bank said in a blog posting on Thursday.

The findings may strengthen the ECB's view that inflation was now set to continue a gentle decline towards 2 per cent and bolster arguments to keep interest rates on hold after an unprecedented streak of hikes drove them to record highs.

The ECB found that the 20 per cent of households with the highest income held 49.3 per cent of the excess savings made in 2020-22, followed by the next quintile at 19.8 per cent.