Consumers have less confidence than ever as higher living costs and limited credit squeeze their finances, an expert has asserted.

Martin Gahbauer, Nationwide’s senior economist, made his comments as the organisation published its UK consumer confidence index, which shows economic conditions caused a fall in optimism from January to February.

Furthermore, consumers are less willing to spend money and many lack the confidence to buy a house of a car, the report found.

Mr Gahnauer said: "The continued downward trend in consumer confidence is to be expected given the effect of higher food and fuel costs on people’s pockets and the tightening of the availability of credit."

Late last month, Credit Expert warned that fears of an economic downturn have hit consumer levels of confidence badly, causing almost half of all non-homeowners to believe they will never be able or never intend to buy a home.

Furthermore, one in ten Britons are concerned about their ability to meet their bills and manage debt repayments.