Confidence among shoppers sees largest monthly fall since July 2008, while spending index picks up.
Nationwide's Consumer Confidence Index fell by nine points in March, as the coming election provoked a sense of uncertainty among shoppers. The drop, said the building society, immediately wiped out all increases that have been seen since the start of the year, as the index experienced its largest monthly fall in nearly two years.
However, Nationwide's Spending Index picked up during the month with a two point increase, taking it to a similar level to where it was at the same time last year.
Nationwide chief economist Martin Gahbauer said: "Following a very positive start to 2010, the Consumer Confidence Index has undergone a strong adjustment during March, reversing al growth seen since the beginning of the year... With an election looming, more people will be unsure as to whether they will be better or worse off in the coming months, and recent concerns about the state of the economy and employment prospects could still be playing on the minds of consumers."
Despite this, the Spending Index revealed that, after three months of decline, spending confidence in the UK picked up slightly last month. Mr Gahbauer explained that confidence in this area remains "relatively high" compared with past two years but that consumers were still putting off spending on products for the home.
He added: "Official figures showed a strong rebound in February retail sales from January's snow-related weakness, and survey indicators suggest that growth continued into March. However, March did see a small drop in the percentage of consumers who believe now to be a good time to buy household goods, despite positive sounds coming from the high street."