Consumer confidence fell for the third month running in October to its lowest level since the Iraq war in early 2003.
Consultancy GfK NOP said its confidence barometer unexpectedly fell to -8 this month from -5 in September. Analysts had expected the index would be unchanged at -5.
That was the lowest since March 2003, the month of the US-led invasion of Iraq.
"We continue to see the nation in subdued mood compared to the earlier part of 2005. Confidence continues on a downward trend," said Grant Montague, divisional director at GfK.
Particularly striking was the fall in the index measuring people's expectations of their own personal finances which slumped three points to +7, its lowest level since September last year.
The index measuring whether people thought it was a good time to make major purchases fell seven points to +2, its lowest since November 1999.
"It continues to suggest that the consumer is fairly soft at the moment," said David Page, an economist at Investec. "Christmas could be a tough one for retailers."
The latest report followed an equally gloomy weekend survey from the CBI.
It predicted fresh job losses in manufacturing firms as higher energy prices and falling demand made life "tough" for the sector.
Small and medium-sized companies predicted that worse was to come, with just one in eight more optimistic about the business outlook than earlier in the year.
The survey of 654 firms showed that one in ten expected to cut jobs in the next few months.
Orders fell for the third successive quarter and firms did not not expect any improvement in the final three months of the year.
Falling output and higher energy bills pushed up costs, while prices remained virtually unchanged.
Hugh Morgan-Williams of the CBI said: "Small and medium-sized manufacturers are a good barometer of future economic progress.
"They are the first to feel the effects of an ill wind and the last to recover. Higher production costs as a result of rising charges for energy, oil and raw materials, coupled with stagnant output prices mean that smaller manufacturers are being squeezed at both ends.
"As the consumer spending slowdown filters into other areas of the economy SME manufacturers have now experienced three consecutive quarters of falling output and are technically in recession.