As high interest rates make their way through Canada’s economy, a report from a major bank says high household savings here and in the U.S. might help both countries avoid a severe downtown.

That from senior BMO economist Sal Guatieri, who says though pandemic savings have shrunk significantly, many households still have above-average savings.

He acknowledges that middle and upper-income households have most of the excess savings at this time, while low-income families have depleted most of theirs.

”That’s not surprising, given, number 1, they built up relatively lower savings to begin with than upper incone households,” Guatieri points out.

”They’ve (also) been more challenged with the rising cost of necessities.”

While excess savings among some Canadians may serve as an economic buffer, he warns they may also be a ”double-edged sword” for central banks fighting inflation.