As debt begins to spiral out of control for many families, consumer confidence about the state of the economy has reached its lowest level since November 1992.

Gfk NOP have said that thei latest consumer confidence index – which tracks Britons’ thoughts and feelings about the economic situation – shows that the UK are becoming less optimistic about their ability to spend money now and their prospects for doing so over the course of this year.

The overall financial confidence level has dropped 18% from the same time last year. Rachael Joy from GfK NOP remarks: “With the news dominated by stories of recession, the credit crunch, housing market falls, and future petrol and food price increases, it will take more than a quarter point reduction in interest rates to alleviate the current gloomy mood of the UK consumer.”

However, the research also suggests that the economic climate is leading people to think more about their savings, as this rose 3% from the previous month.