The fall in consumer confidence was driven by falls in general economic outlook, with a five-point drop in confidence in the general economic situation of the country over the past year to -71, which is 24 fewer points than a year before.

Expectations for the economy for the year ahead were at -54, a point below December and 22 points lower than the previous January.

The major purchase index also plummeted six points to -40, 30 points fewer than in January 2022.

The index is based on a sample of 2,000 UK adults surveyed between 3rd and 12th January 2023.

Perceptions of personal finances over the last 12 months decreased three points to -31 and the forecast for personal finances over the next 12 months increased to -27, however, both measures are 25 points worse off than the same period last year.

The savings index, which measures whether now is a good time to save money, dropped six points but remained in positive territory at 14.

The results follow a small recovery in consumer confidence levels seen in the fourth quarter of 2022 after hitting the lowest score in the history of the consumer confidence index in the summer amid a severe cost-of-living crisis.

Joe Staton, client strategy director at GfK, said: “Consumers have a New Year hangover – but it’s of the economic kind – with high levels of pessimism over the state of the wider economy. And unlike a conventional hangover, this one won’t vanish quickly.

“The only glimmer of hope in the results is a slight uptick in the outlook for our personal financial situation, but this is of little comfort because it is still 25 points lower than this time last year.

“With inflation continuing to swallow up pay rises, and the prospect of some shocking energy bills landing soon, the forecast for consumer confidence this year is not looking good. One thing we can be sure of is that 2023 promises to be a bumpy ride.”