Consumer confidence in Britain slumped this month to its lowest level since March 1990, when the economy was teetering on the edge of a protracted recession, a survey showed on Monday.

The GfK NOP consumer confidence barometer fell to -34 in June from -29 in May. It was the second lowest reading in the survey's 34-year history and 31 points lower than June 2007.

Britons are less confident about the future health of the economy than at any time in at least 26 years, with the expectations measure for the next year falling to -45 from -39.

"With rising inflation, gloomy forecasts for interest rates and soaring fuel, utility and food prices dominating the front page headlines, it's no surprise that confidence in the general economy is almost in freefall," said Rachael Joy at GfK NOP.

The figures deal a further blow to embattled Prime Minister Gordon Brown who has just completed a year in power with his Labour party facing the risk of defeat at the next election due by May 2010.

Brown built a strong reputation presiding over a decade of economic prosperity as finance minister before taking over from Tony Blair as Prime Minister last year.

He then enjoyed a commanding opinion poll lead over the opposition Conservatives, but has fallen out of favour with voters after the collapse of lender Northern Rock, party funding scandals, unpopular tax changes and growing concerns about the economy.

Most economists do not expect Britain to slip into a recession, despite concerns about the impact of the credit crunch and a housing market downturn.

However, official growth figures for the first three months of the year were revised down on Friday to show the economy expanding by just 0.3% quarter-on-quarter -- the weakest rate for three years.

One Bank of England policymaker -- arch-dove David Blanchflower -- has warned a recession could be on the cards unless the central bank takes immediate, remedial action.

However, there is little sign the rest of the Monetary Policy Committee are in any mood to cut borrowing costs as inflation is running at its strongest rate since the BoE was given independence over monetary policy in 1997.

Markets are actually betting on higher interest rates to help tackle rising price pressures, although a slowing economy is expected to help tame inflation over time.

The GfK NOP survey was conducted between May 31 and June 15.
      
Financial mirror, 01/07/08