Confidence levels among British consumers are on the slide, according to the latest figures from the Nationwide Building Society.
Rising living costs, including those associated with food prices and fuel bills, have been partly blamed for the fall in confidence around the country.
With millions of people struggling to become debt free, the building society has reported that the restrictions being put on the availability of credit has also had an impact on how Britons feel about their finances.
Both men and women have remained as confident about their employment prospects as they were a month ago, but a third of people now feel that the economy is bad shape, compared with a quarter at the end of January.
Martin Gahbauer, Nationwide’s senior economist, said: “It is perhaps too early for the base rate reduction at the beginning of February to have had any effect, but it is unlikely in current conditions that consumer confidence will return to the highs of 2007.”
Last week, the Credit Action charity claimed that rising inflation across the UK is leaving many people with little choice but to use credit card debt to fund their everyday expenses.