Households in the United Kingdom are starting to draw on savings built up after COVID-19 to cope with higher living costs, causing new deposits in June to drop 20% from a year earlier to just 6.3 billion pounds. After energy prices surged about 20% since February, data from the Bank of England also show that household savings in the first quarter stood at 44.5 billion pounds, down 14% compared with a year ago, while the savings rate fell below 9% from double-digit levels in 2024. Economists view that consumers are choosing to reduce saving rather than cut spending to maintain their standard of living, with consumer spending, which accounts for about 60% of economic activity, remaining robust despite concerns that the savings buffer may prove insufficient if the conflict between the United States and Iran drags on.