British households are saving less than ever before amid the longest period of falling real household incomes in forty years, official figures show.

The Office for National Statistics (ONS) said the UK's dominant services sector expanded at the slowest quarterly pace in two years at the start of 2017.

Household spending growth slowed amid higher inflation, although the data also suggested growth was likely to pick up in the second quarter of this year.

The ONS said the household saving ratio - which measures the amount they have available to save as a share of disposable income - halved to 1.7pc in the first quarter of 2017, from 3.3pc in the final quarter of 2016.

This is the lowest rate since records began in 1963 and suggests Britons have been dipping into savings to maintain their standard of living.