Consumer confidence plummets amid election jitters

The Nationwide Building Society said its monthly consumer confidence index fell to 72 in March, the lowest since December, from a two-year high of 81 set in February.

Driving the fall in the main index was a record drop in the expectations component, which Nationwide blamed on uncertainty about the economic outlook due to the upcoming election.

The opposition Conservatives hold only a narrow lead over Prime Minister Gordon Brown's Labour Party ahead of the May 6 General Election, raising the prospect of a 'hung parliament' in which no party has overall control.

"With an election looming, more people will be unsure as to whether they will be better or worse off in the coming months, and recent concerns about the state of the economy and employment prospects could still be playing on the minds of consumers," said Nationwide economist Martin Gahbauer.

Nationwide said the fall in confidence was more pronounced than a similar decline before the last national election in 2005, probably due to the weaker state of the economy this year as well as the fact that the election result is less certain.

Worries about unemployment were increasing, despite a fall in the number of jobless. But consumers' willingness to spend on big-ticket purchases increased after three months of declines.

The survey was conducted between February 15 and March 21 and was based on responses from 1,000 people.