Consumer morale lowest in over 13 years

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The figures will make grim reading for Prime Minister Gordon Brown who has boasted Britain's economy is in a good position to withstand the global credit crunch.

"It's somewhat disconcerting that sentiment hasn't improved after the rate cuts," said Philip Shaw, chief economist at Investec. "It suggests we could be in for an entrenched period of weak household consumption."

The Bank of England has cut rates twice in the space of three months, bringing them down to 5.25 percent.

Research firm GfK NOP's consumer confidence barometer slid to -17 in February from -13 last month, the lowest reading since December 1994. Analysts polled by Reuters had expected a more modest decline to -14.

GfK brought forward the release time for the survey, originally set for Friday, by a day.

Britons are not alone in feeling the squeeze from tighter credit and rising household bills. French consumer confidence fell in February to its lowest since records began more than two decades ago.

Component indices showed the decline in Britain was broad-based. The "climate for major purchases" index fell to its lowest since December 1990, while the index measuring how people expected the economy to perform over the next 12 months hit its lowest since November 1992.

"Consumers are feeling a little less confident about their own personal finances and much less confident about the general economy as a whole," said Rachael Joy, a researcher at the group.

The survey was carried out in the second week of February, just before the government announced the nationalisation of ailing mortgage lender Northern Rock.