Households told GfK they had become much less confident about making large purchases over the last month, signalling they are likely to constrain spending.
Mr Bellamy said: “People are almost retrenching in their spending and protecting themselves and their family first of all.”
Confidence has fallen faster among the oldest cohorts, underlining that scrapping the winter fuel payment was “playing on people’s minds”.
Mr Bellamy said: “People have got a bit scared about the future. Since Labour has come in there has been a lot of talk about serious decisions to be made, we’ve got to look at budgets, there might be pain to go through. People are taking it very seriously.”
Jagjit Singh Chadha, the director of the National Institute of Economic and Social Research, said the Government’s “dominant narrative since the election victory” cannot “really have helped”.
Mr Chadha said: “What we really want from the new Government is a statement of confidence that they can roll up their sleeves. There is a reluctance to just be a little bit more courageous about how we’re going to sort out our problems.”
Andrew Wishart, senior UK economist at Berenberg, noted that falling interest rates and low inflation should make families more upbeat about the future.
He said: “That normally causes consumer confidence to strengthen. Therefore what is driving it very much so [is] the Government’s tone ahead of the Budget.”