Its consumer confidence index dropped three points in September to 45 points, just four points above its all-time low in February 2011.
However, Nationwide’s spending index, which fell back slightly in September, has been more resilient in recent months with a quarter of consumers believing now is a good time for a major purchase.
The survey also found that consumers expect the value of their homes to decrease by 0.8% over the next six months.
It said economic growth is expected to remain weak over the next six months, but the injection of £75bn of quantitative easing from the Bank of England announced earlier this month could “provide some support for confidence going forward”.
Robert Gardner, Nationwide’s chief economist, said: “These relatively downbeat findings are understandable given the challenging economic backdrop. The economy has hardly grown in 2011 and pressure has continued to mount on household budgets.
“Labour market conditions have deteriorated, with the unemployment rate moving up to 8.1% in the three months to August, its highest level for fifteen years.”
