Worries over the longer-term future of the economy have served to dent consumer confidence still further.
The latest consumer confidence index survey by the Nationwide has revealed that optimism about the future among households dipped in July and looks likely to slip further in August.
The most recent reading hit the 49 point mark, where any score below 50 indicates that sentiment is in negative territory.
The new figure compares unfavourably with the 51 registered in June, and sits significantly lower than the index average of 79.
Consumers are being deterred from making large purchases on the back of general concerns about the strength of the economic recovery.
There was little evidence of any boost in consumer spending during the three months from April to June, the survey reported.
Confidence has been hit by a combination of a continuing threat of unemployment, subdued wage rises and a stubbornly high rate of inflation.
Robert Gardner, the Nationwide’s chief economist, said: “With the economic recovery still facing string headwinds, it is unlikely that we will see any considerable improvement in confidence in the remainder of 2011.
“Indeed, it may be that we see a further deterioration in August, following the riots in a number of UK cities and the sharp declines seen in stock markets around the world.”
