LONDON, Oct 31 (Reuters) - The global financial crisis weighed heavy on British consumer morale in October and fears about banks' stability and the economy made people reluctant to save or spend, a survey showed on Friday. Research company GfK NOP said its consumer confidence index slipped to -36 in October from -32 in September. Analysts had expected a more modest easing to -35.
October's poor reading came despite an emergency 50 basis point cut in UK interest rates and will likely reinforce expectations that the Bank of England will deliver another aggressive cut from 4.5 percent next week.
Roughly half the responses came before the BoE rate cut on Oct 8 and half afterwards.
The survey showed Britons' expectations for their own finances and for the economy as a whole remained gloomy, this month, when the threat of financial collapse forced the government to bail out Britain's major high street banks.
In addition, the collapse of Iceland's banking system, which left thousands of British savers uncertain whether they would ever see their cash again, helped push people's propensity to save to a four-year low, and fears of hard times ahead knocked their willingness to buy major items to a record low.
The "now is a good time to save" index fell nine points on the month to +9, the lowest since the start of 2004. And the "climate for major purchases" index slumped to -43, the lowest reading since records for that measure began in 1982.
"Consumers are not at all confident about buying major purchases as rising food and energy bills leave them increasingly worried about keeping up with payments, and saving has also seen a considerable drop, possibly due to fears of the safety of savings," said Rachael Joy of GfK NOP.
The index gauging people's perceptions about the state of the economy in the last 12 months plunged to its lowest since 1992, when Britain was in recession.
"Even the reduction of the interest rate and lower petrol prices are unlikely to have a significant effect on confidence in the upcoming months as consumers brace themselves for what they see as a very difficult economic time over the Christmas period," said GfK NOP's Joy.