Consumer confidence slumped last month at its fastest rate in more than three years, according to Nationwide, raising fears that the high street faces a grim Christmas.

The lender said its consumer confidence index slid to 86 in November from 98 in October. The fall was the steepest monthly drop since the survey began in May 2004.

Fionnuala Earley, Nationwide's chief economist, said: "Uncertainty about the effects of the credit crunch, together with rising oil and food prices, seem to be affecting feelings about jobs and the future economic situation.”

News of a collapse in sentiment among British consumers will bolster the case for a rate cut at the Bank of England’s Monetary Policy Committee meeting this week.

The findings tally with a survey by GfK NOP last week, which indicated that confidence among shoppers fell for a fifth consecutive month in November to its lowest level since 2003.

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