Consumer confidence fell to its lowest level for more than a year in September as people worried about Government spending cuts.
Confidence dropped across all measures in the month, with people feeling particularly uncertain about spending money themselves, according to Nationwide.
The group’s main consumer confidence index dropped by nine points to 53 - the lowest level since March 2009.
There was a steep fall in the present situation index, which dropped five points, with nearly two-thirds of people saying the economic situation is bad.
The expectations index dived by 12 points, with 31% of people thinking the economy will have deteriorated further in six months, while 58% think there will still not be many jobs available.
But it was the spending index that saw the sharpest fall, dropping by 14 points to 85 - the lowest level since November 2008.
Just one in four people said they thought it was a good time to make a major purchase, such as a house or car, and only 35% thought it was a good time to buy household goods.
The overall fall in confidence reversed the gain seen in August, putting the main index back on the downward trend seen since the spring.
Martin Gahbauer, Nationwide’s chief economist, said: “September saw confidence return to its downward path following what now appears to have been a temporary uplift in sentiment during August.
“It would seem that the pessimistic sentiments of a few months ago have been renewed and this has perhaps been driven by a realisation of the true impact of the cuts announced in the emergency Budget.
“The Government’s impending spending review is likely to have a strong influence on consumer confidence in the coming weeks and we can expect the index to remain volatile until the full impact of this has been assessed.”
He added that the fall in the spending index could be a cause of concern for retailers in the run-up to Christmas, as consumers may be beginning to feel the pinch in their spending power.
Expectations for house prices increased marginally during the month, with consumers expecting the cost of property to rise by 0.1% during the coming six months, compared with predicting a drop of 0.1% in August.
:: TNS-RI questioned 1,002 people between August 23 and September 19.