Household savings increased by almost €700m over the second quarter of the year as hard-pressed consumers continued to reign in spending and pay down debt.

The latest quarterly institutional sector accounts from the Central Statistics Office show gross household savings increased from €3.6 billion to €4.3 billion compared to the same period in 2011.

What the CSO refers to as the derived savings ratio, which is total savings as a percentage of the gross disposable income available to households, increased from 16.2% to 18.8%.

Separate CSO figures show consumer spending continued to fall throughout the period continuing a four-year downward trend.

Disposable income rose by 2.2% over the three month period due mainly to a €473m increase in profits earned by the self-employed.