In a sign consumer spending may be picking up, the central bank has reported growth in personal savings slowed in the third quarter while fixed-term deposits fell. Mainlanders have spent more on bonds, stocks, holidays and education. The Economic Daily yesterday quoted figures from the People's Bank of China showing individual bank savings rose by 2.48 billion yuan (about HK$2.31 billion) in the third quarter, down from a growth of 11.33 billion yuan in the same period last year. The monthly increase was 621 million yuan, sharply down from the monthly increase of 5.97 billion in the first five months of the year. Fixed-term bank deposits in July, August and September fell by a cumulative 3.66 billion yuan, as people switched their money to current accounts which they could access any time. The bank gave several reasons for the change. Individuals have put more money into the stock market and into bonds. In the third quarter, banks in Beijing, for example, sold 6.75 billion yuan worth of bonds, up from 4.5 billion yuan year on year. The government has announced from November 1, savers will pay a 20 per cent tax on the interest from their bank deposits. Interest from bonds and stock-buying funds remains free of tax. A further reason for the figures was higher spending on homes, especially cheap ones, as the bank increased the issue of personal mortgages. The National Day holiday this year lasted for seven days, so many people took trips away from home and spent more. This year, the number of students entering the upper level of secondary school was 1.53 million, an increase of 450,000 over last year, which caused higher spending on education. But this spending has yet to stop deflation, with September marking its 23rd consecutive month. For the first nine months of this year, the retail price index fell 3 per cent year on year and the consumer price index, which measures a broader range of goods and services, fell 1.6 per cent. In August and September, respectively, the retail price index fell 2.6 per cent and 2.8 per cent and the consumer price index fell 1.3 per cent and 0.8 per cent. BANKING