LONDON (Reuters) - Consumer confidence in Britain fell last month at its fastest rate in more than three years, a survey showed yesterday, in a further sign the credit squeeze and rising living costs are affecting morale.

The Nationwide building society said its consumer confidence index slid to 86 in November from 98 in October. This was its biggest monthly drop since the survey began in May 2004 and took the index to its lowest level since the start of this year.

"Uncertainty about the effects of the credit crunch together with rising oil and food prices seem to be affecting feelings about jobs and the future economic situation," said Fionnuala Earley, Nationwide's chief economist.

Falling consumer morale is likely to raise pressure on the Bank of England to cut interest rates this week to shore up the economy.

All four component indices registered falls with the biggest deterioration seen in the spending index — grim reading for retailers in the run-up to Christmas — and the expectations index, which gauges how consumers see the economic landscape in six months' time.

Expectations for house price growth continued on a downward trend with consumers anticipating just 1.2 percent growth in prices over the next six months, down from 1.9 percent in October.

The findings tally with a survey by GfK NOP last week which showed British consumer morale fell for a fifth month running in November to its lowest level since the start of the Iraq war in March 2003.