Consumer confidence has fallen to the lowest level in four years, according to the latest monthly survey from Nationwide, Britain's largest building society lender.

Its index fell to 69 in May from 70 in April, marking the lowest level since the survey began in May 2004.

Nationwide said that its expectations index, which measures views about the economy, employment and incomes in six months' time, rose one point to 75 in May, but remained almost 25% weaker on the year.

More than half of those surveyed thought the current economic situation was bad compared with only 39 per cent last month and 17 per cent a year ago.

The news will do little to lift the gloom on the high street as homeowners rein in their spending amid falling house prices and tighter mortgage lending.

Fionnuala Earley, Nationwide's chief economist, said: "Darker economic news throughout the month as fuel prices reached new highs, food prices remained elevated and uncertainty about an early cut in interest rates heightened are likely to be major factors behind this."

Kingfisher, owner of the B&Q, Trade Depot and Screwfix DIY store chains, announced today that its first-quarter trading had been tough as management reduced its predictions for sales growth for the rest of the year.

Ms Earley added: "Confidence in spending also took a big knock, but continued faith in the jobs market suggests that this is being driven by the squeeze on people's incomes from higher prices and weakness in the housing market, rather than fears over job security."

Last week, separate figures from Nationwide reported that house prices had suffered their biggest drop for at least 17 years.

The price of an average house fell 2.5 per cent in May, making the seventh consecutive monthly fall in prices, the longest downward slide since the end of the early Nineties housing crash.

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