Consumer confidence in the UK fell sharply in December, according to a new report.
The Nationwide Consumer Confidence Index for last month fell from 51 points to 47, as fears over the impending recession grew and the festive period put a strain on Britons' finances.
However, the findings also revealed that spending had risen sharply during December, which may suggest that the new year is a good time to make household purchases.
And although the high street has been awash with post-Christmas sales, bargain prices still may not go far enough to convince people to part with their cash, the group warned.
Fionnuala Earley, Nationwide's chief economist, said: "Consumers' confidence fell sharply in 2008, driven mainly by their sentiment about the economic and labour market situation. As the UK enters recession it is likely to be some time before we see confidence returning to levels seen in 2007."
Meanwhile, the group also predicted that the monetary policy committee will make a 0.75 percentage point cut to the base rate of interest this month.
The group will meet tomorrow (January 7th) to make its decision - which it will announce on Thursday.
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