The Nationwide Consumer Confidence Index fell by 4 points to 94 in February, and is 16 points down on a year ago. This was the 9th fall in 12 months and the first time since the index began in May 2004 that all four indices have fallen in the month.

The four indices measured by Nationwide in partnership with TNS are: the consumer confidence (main) index, the present situation index, the expectations index and the spending index.

The main consumer confidence index fell from 98 to 94 in February and is now sitting just above its all time low of 92 (seen in October 2005). This is the first time that the main index and the three supporting indices have all shown falls since the index began in May 2004. In addition to the monthly falls, all but the spending index are now below their 3-month average levels.

Stuart Bernau, Nationwide’s executive director, said: "It is difficult to take any comfort from the latest figures. Bad news on jobs, retail sales, rising fuel and energy prices have all combined to undermine consumers’ confidence."

"With many facing council tax rises and uncertainty on the high street the outlook is gloomy. Peoples’ confidence in the present economic and employment situation is near all time lows."

"Unemployment is at its highest rate for three years and with more job losses being announced, the gloom could continue into the Spring."

The prospect of a weaker economic recovery will present a challenge to Gordon Brown as he prepares for the 2006 Budget, pointed out Stuart Bernau.

"Interestingly, confidence in house prices, which has held up well even as other variables fell, has also begun to decline, and slipped for the second consecutive month in February," he said.

Consumers now expect house prices to rise 2.4% over the coming six months, down from 2.6% in January, bringing consumers' predictions more in line with Nationwide's own forecast of a 0-3% change over the year.