Consumer confidence has fallen to its lowest level since the recession, affecting retail demand and footfall across UK dealerships.

The consumer confidence index by GfK NOP fell by four points to minus 25.

The Office for National Statistics has also highlighted a downturn in savings, with the money left to put aside after all household spending falling to 4.6% from 5.1% in the first three months of 2011.

Business secretary Vince Cable believes growth has been weak and the Bank of England should undertake another round of quantitative easing.

Cable told the BBC said: “There is a genuine problem with demand, especially consumer demand.

“If there is a sustained period of weakness of demand, the right approach to that is not for the government to relax its fiscal discipline. We have to keep that going.

"It is about the Bank of England pursuing policies of low interest rates, which also help keep our exchange rate down and help exports, but also using expansion, quantitative easing in more imaginative ways, not just in acquiring government securities."

Nick Moon, managing director of GfK NOP Social Research, said: "It was almost inevitable that there would be a drop confidence in June following last month's unique, feel-good circumstances of public holidays and the royal wedding.

"What will disappoint the government is that the drop is so large – wiping out half of last month's gain and leaving consumer confidence lower than it was at any point in 2010.

 

"Across the board, confidence is lower than it was this time last year. Consumers' feeling about their own financial situation over the coming 12 months may have been the best scoring item but it still suffered a five-point drop in June, leaving it at -8. As we move into the summer, the outlook for the beleaguered high street remains a gloomy one."