The firm’s Consumer Confidence Index, which questions 1,000 people, indicated while consumer confidence is still low, it rose four points between October and November.

The current index position is 40, up from 36 in October but seven points lower than November 2010.

While the rise is good news, it is still below the long-running average of 77 points.

Robert Gardner, Nationwide’s chief economist, said: “The small rise in consumer confidence recorded in November can hardly be described as festive cheer but at least confidence has moved off its all time lows in the run up to Christmas."

Some 70 per cent of people rated the economic situation as bad, down from 76 per cent in October. Some 68 per cent rated the employment situation as bad, up from 65 per cent in October.He said the rise was likely caused by the fact inflation has passed its peak and appears to be steadily falling.

Another positive was the increase in the expectations index which rose by seven points, indicating improved confidence about what the economy will be like in six months time.

Spending confidence remained steady with consumers still worried about their expenses for Christmas and indicating retailers will experience difficulties in the run-up to Christmas.