Some economists have linked the drop to officials' warnings of a "painful" Budget at the end of August, although it is impossible to prove a link. There were "major corrections" - or double digit falls - for consumers' perception of the general economic situation, as well as how likely they were to make big purchases.

Starmer insists he is setting out reality of ‘badly damaged economy’ as GfK survey shows sharp fall in household morale

The last time the index declined so steeply was in April 2022, in the wake of Russia's invasion of Ukraine which sent energy costs soaring.

Rachel Reeves will raise taxes by up to £16 billion in the autumn Budget to avoid inflicting austerity cuts on Britain’s public services, economists are predicting. They believe the Chancellor may hike inheritance tax,