The confidence consumers have in the economy fell for the seventh month in a row during April to hit an all-time low, figures have shown.

Nationwide Building Society said its Consumer Confidence index dropped by seven points during the month to stand at just 70, its lowest level since it was first launched in May 2004 and 20% below April 2007's figure.

The fall was driven by people worrying about the economy, with just 17% of people thinking the current economic and employment situation is good, less than half the 36% who felt upbeat in August before the full impact of the credit crunch hit.

At the same time, 39% of people now think the economy is in bad shape, pushing the group's index which measures people's confidence in the present situation down to a new low of 65.

All measures of confidence fell during the month, with people's sentiment about the economic and employment situation in six months' time dropping for the first time this year.

Around 45% of people now think the economy will get worse going forward, while just 32% think there will be the same number of jobs available.

People's pessimism about the economy is causing them to tighten their belts, with 60% of people thinking now is a bad time to make a major purchase such as a house or car and 12% think it is a bad time to buy household goods.

But there is still a reluctance among consumers to believe that the current problems will affect their incomes, with 86% still expecting their pay to be the same or higher in six months' time.

Fionnuala Earley, Nationwide's chief economist, said: "The cut in interest rates in April did little to lift consumer spirits.

"Food and fuel prices remain high and, with house prices no longer rising, it is unlikely that consumer confidence will pick up very quickly.

"We may have to accept that confidence levels could well worsen before they get better. This is especially true as inflationary pressures mean the Monetary Policy Committee will probably prefer to cut rates at a more gradual pace than many would prefer."

Consumers also remain pessimistic about house prices, expecting the cost of the average home to fall by 1.7% during the coming six months.

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