Its Consumer Confidence Index, which had recorded growing confidence so far this year, suffered a fall from 81 points out of a possible 100 in February, to 72 points in March.
The news will come as a blow to the Government, which is currently attempting through its election campaign to reassure voters that Labour is best placed out of the political parties to bring about an economic recovery.
Other recent data and surveys have indicated that the economy is starting to recover.
The decline in confidence was driven by a sudden turnaround in what had been a growing feeling of optimism about the outlook for the economy for the rest of this year.
The proportion of those surveyed who said the economy will be in better shape in six months’ time fell to 33% from 39% in February, while the proportion of those saying it will be in the same condition as now rose to 48% from 44%. The survey was conducted before the Budget on 24 March.
The index also recorded growing pessimism regarding the outlook for the jobs market, with 48% of respondents saying they believe there will be fewer jobs available in six months’ time, compared to 43% in February, despite official figures that show the unemployment rate has started to fall.
A sustained reduction in consumer confidence risks damaging the economic recovery. However, it is possible that the latest results are simply a blip reflecting pre-election nerves and general uncertainty.
Nationwide said a similar increase in concerns about the economic outlook and the jobs market occurred ahead of the last election in 2005.
Martin Gahbauer, Nationwide’s chief economist, said: “With an election looming, more people will be unsure as to whether they will be better or worse off in the coming months.”
Figures on gross domestic product in the first quarter of this year will be released on 23 April, and may affect how voters think about the economic outlook, either to the benefit or detriment of the Government.
