The threat of war in Iraq and the prospect of a tumble in the housing market have dragged British consumer confidence down to its lowest level for over a year, according to a report from Martin Hamblin GfK.

Conducted on behalf of the European Commission, the survey’s headline consumer sentiment index nose-dived six points in December to hit a reading of minus four, the lowest it has fallen since October 2001. The decline was the steepest since the fuel protests in autumn 2000.

Interestingly, consumers’ confidence in the outlook for their personal finances – as opposed to the economy as a whole – held up well, with the index for this category dipping just two points to +11.

The deterioration in consumer sentiment took the shine off of positive data from the Office for National Statistics, which revealed that the British economy exceeded expectations in the third quarter with 0.9% GDP growth compared with Q2.

Such expansion - aided by the adverse effects of the Queen’s Golden Jubilee celebrations on second-quarter GDP [WAMN: 07-Aug-02] - is the fastest in nearly three years, and represents a 2.1% rise compared with Q3 2001.

Data sourced from: multiple sources; additional content by WARC staff