People are less optimistic about the state of the economy and their job prospects than they were three months ago.

The latest quarterly survey by analysts Business Strategies showed the "feel-good factor" fell across the UK in the second quarter of the year. The fall in confidence was worst in East Anglia but deep falls were also found in the South East, including Sussex, Scotland and Yorkshire.

Only Wales, where people were marginally more confident, and the South West, where sentiment was unchanged, escaped the downwards trend.

In East Anglia and West Midlands "people now believe the dole queues will lengthen over the coming 12 months", Business Strategies said.

Households in most regions said they felt worse off than a year ago, with the South East, excluding London, the East Midlands and Scotland all reporting large falls in confidence on this score.

Worries about the economy and jobs have filtered through into the high street, making people less likely to buy items such as TVs, washing machines, hi-fis, fridges and freezers.

In nine out of 12 UK regions, the share of consumers who saw an advantage in buying these so-called "big ticket" items fell during the second quarter of the year. This trend is forecast to continue for the rest of the year.

Business Strategies managing economist Melanie Lansbury said: "We are now seeing consumer spending growth down to levels last seen at the end of 1998, when talk was of possible recession. Consumer confidence had plummeted and many of the large retailers started to feel the pinch."

Despite this the company forecast consumer spending growth would still rise by 3.4 per cent over the year, compared to its forecast of 3.7 per cent in the spring.