Its consumer confidence index recorded a reading of 49 last month, well below its average reading of 79 and down on 51 in June, amid increased uncertainty around the UK’s economic outlook.
Nationwide’s chief economist Robert Gardner, said: “With the economic recovery still facing strong 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 riots in a number of UK cities and the sharp declines seen in stock markets around the world.”
Nationwide said conditions for the UK economy remain challenging, especially for consumers.
There was little evidence of a pick-up in growth in the third quarter, after disappointing data for April to June, the survey showed.
Gardner added that the combination of weak employment growth and wage increases has acted as a drag on consumer confidence.
Major purchases of big-ticket items were the hardest hit, Nationwide said, and consumers continue to expect a fall in house prices over the next six months.
