Job fears see spending take tumble

The fall in spending came as people also reported a rise in debt for the first time since the beginning of the year, as well as a moderate decline in their income levels, according to financial information group Markit.

Around 27 per cent of people said their household finances had worsened during October, while 45 per cent expect them to continue to deteriorate in the coming months.

Job security remained a major worry for households during October, with 24 per cent saying they thought their job was now less safe than it was in September.

Unsurprisingly, public sector workers reported the sharpest fall in job security ahead of the Government's Comprehensive Spending Review.

At the same time, households are still battling with inflation, with 67 per cent saying the cost of living had risen during October, although the group's inflation perceptions index was down slightly compared with the series high it reached in September.

Tim Moore, economist at Markit, said: "The October Household Finance Index data show that households grew increasingly worried about their future finances in the lead up to the Comprehensive Spending Review."