Consumer confidence at record low

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The Nationwide consumer confidence index fell to just 47 last month, nearly half of its level of 84 in December 2007, and down from 51 in November.

Three quarters of people now think the current economic situation is bad, but it was the 57% who think there are now few jobs available who drove the index down.

Consumers are also finally recognising that the current economic situation will affect their incomes, with 19% of those questioned expecting their household income to be lower in six months' time, compared with 16% in November - the largest monthly change for more than a year.

Fionnuala Earley, Nationwide's chief economist, said: "Consumers' confidence fell sharply in 2008, driven mainly by their sentiment about the economic and labour market situation. As the UK enters recession it is likely to be some time before we see confidence returning to levels seen in 2007."

Consumers are bracing themselves for worse going forward, with 49% expecting the economic situation to have deteriorated in six months' time, while a record 63% expect there to be few jobs available.

But despite their pessimism there was a steep jump in the number of people who think now is a good time to buy household items such as white goods or furniture at 41% compared with 28% in November.

The group said the rise was likely to have been triggered by heavy pre-Christmas discounting, adding that recognising that now was a good time to make a purchase did not always indicate a willingness among consumers to part with their cash.

The number of people who thought it was a bad time to make a major purchase, such as a house or a car, also fell by 7% to 51% during December, possibly in recognition of the fact that falling house prices have increased affordability.

TNS questioned 1,000 people between November 17 and December 14.