In the latest consumer confidence index released by Nationwide, Britons' outlook towards money decreased by 12 points over the course of November to stand at 86 - the largest monthly drop ever recorded. However, a downturn in peoples' views on financial matters, on areas ranging from buying goods and personal loans to savings accounts and interest rate changes, is expected. The company reported that "the spate of gloomy news" over recent months is beginning to have an impact on the wider public. It was suggested that petrol prices surpassing the 1 pound per litre mark and the credit crunch impacting upon the availability of cheap loans were all having an effect. In addition, a rise in food prices was purported to be having an impact on people's sentiment.

Research from the financial services firm revealed a fall across all of its indices which make up the index. Over the course of November, the expectations index, which charts people's views about the state of Britain's economy and employment prospects, dropped by 14 points to stand at 83. Consequently, this is the second-largest decrease noted since Nationwide began its studies and the lowest level recorded since January. In addition, the present situation index, tracking feelings about the current economic and employment situation, went down by eight points.

Meanwhile, the number of Britons who believe that it is a good time to make a major purchase such as a car, the buying of which could be funded through a cheap loan, also decreased. More than half (57 per cent) of those surveyed believe that it a not good moment in which to buy such items, up from the 51 per cent recorded in October. In addition, just over a third (35 per cent) claim that this is an ideal opportunity to get household wares, such as electrical goods, in comparison to 40 per cent from the previous month.

However, despite the lack of optimism in regards to the country's economy and general employment situation, many people believe that this will have little effect on their household finances - as 89 per cent of those questioned state their household income will be the same or higher within six months' time.

Commenting on the figures, Fionnuala Earley, chief economist for Nationwide, said: "We've been expecting consumers to react to the events of recent months for some time so the fall in the index this month was not a surprise. Uncertainty about the effects of the credit crunch together with rising oil and food prices seem to be affecting feelings about jobs and the future economic situation. With this in mind, it is natural that consumers would think about tightening their belts this Christmas and this is reflected in the weaker spending index. Going forward into 2008, the expectation of at least two cuts in the base rate should begin to take pressure off finances and restore some confidence."

With such a fall in financial confidence noted, now could be an ideal time for people concerned about their ability to manage their money to apply for a low cost personal loan. In doing so, borrowers could be able to meet various demands on their spending quickly, carry out home improvement work and finance the perfect Christmas. However, consumers may be advised to take the time to search for the most competitive deal possible to avoid further trouble with spending. Earlier this year, Ron Gainsford, chief executive of the Trading Standards Institute, reported that borrowers should also make sure that they get the cheapest loan possible and ensure that they can afford to make repayments.