Consumer confidence in Britain has fallen to its lowest for 16 years as fears heighten about the strength of the economy over the next year.

The GfK NOP Consumer Confidence Index showed that April sentiment about the general economic situation over the next year has fallen by five points to -38, a fall of 20 points compared with the same month last year and the lowest score since 1992.

The perception of the economic environment over the past year has also deteriorated, resulting in a score of -53 points during April, compared with -28 in the same month last year.

Consumers are also less confident about their personal finances. The score measuring confidence over the next 12 months fell four points to -8, a level not seen since December 1996, and more people think that they should be saving.

Rachael Joy, economist at GfK NOP, said: "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."

Howard Archer, chief UK and European economist at Global Insight, said: "With consumer confidence at its lowest level since late-1992, the CBI reporting a sharp slowdown in retail sales in April, mortgage approvals at their lowest level for 16 years and the Nationwide reporting a steeper fall in house prices in April, pressure is mounting on the Bank of England to quickly cut interest rates again, despite current elevated inflation levels and risks.

"For now, we still lean towards the view that the next cut in interest rates, from 5.00 per cent to 4.75 per cent, will come in June. However, further very weak data over the next week could very possibly trigger a May interest rate cut."

Earlier today, Nationwide revealed that house prices had suffered their first annual fall in 12 years, as the pace of the decline increased.

Prices are now 1 per cent lower than this time last year, taking £1,759 off the average price of a home in Britain, which is now £178,555.

Yesterday the CBI revealed that retail sales fell in April to the lowest level since November 2005.

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