Consumer confidence hits record low

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The Nationwide Consumer Confidence Index hit a new record low of 50 during the month as the global economic certainty continued.

The latest fall more than undoes the slight bounce in confidence seen during October.

A record 76% of people said they thought the economic situation was now bad, with 45% expecting it to get worse during the coming six months.

Reports of redundancies are also beginning to take their toll, with 49% of people saying there were few jobs available during the month, also a record, while 59% think this will be the case in six months' time, another new high.

But despite their pessimism on the employment front, the majority of people think they will not be affected by the downturn, with nearly two-thirds believing their household income will be the same in six months' time.

Fionnuala Earley, Nationwide's chief economist, said: "Reports of job cuts have almost certainly impacted on sentiment about the present and future employment situation, causing purse strings to tighten further, even as the festive season gets under way. It remains to be seen whether the Chancellor's recent announcement will greatly improve consumer confidence."

The gloomy outlook comes despite the Bank of England's Monetary Policy Committee surprising markets by cutting interest rates by 1.5% in November.

It is widely expected to make a another big reduction of between 0.5% and 1% when it announces the result of its two-day meeting on Thursday.

The only index that increased during September was the spending one, which rose from 56 in October to 64 in November. But the group said the jump was more likely to reflect people's observations of lower prices rather than an intention to buy.