Consumer gloom grows deeper

Three successive monthly falls have left the Nationwide’s Consumer Confidence Index languishing just seven points above the all-time lows recorded in February, and 30 per cent below its average.

However, the Nationwide said its Spending Index did show spending increased in August, despite the weakening economic outlook, which could be down to growing expectations that interest rates will remain low well into 2012.

The widespread looting in early August and stock market turmoil triggered by fears over global growth will all have dented confidence in the UK, Nationwide said.

The downbeat survey added further gloom over the economic picture after the International Monetary Fund this week slashed its growth forecasts for the UK.

Robert Gardner, Nationwide’s chief economist, said: “Further signs that the UK economy is struggling to gain momentum, disorder in a number of English cities and renewed turbulence in global financial markets would all have been expected to weigh down heavily on confidence.”

Mr Gardner said the global economic backdrop is particularly challenging at the moment.