A plunge in consumer and business confidence raised fresh concerns about a potential recession on Friday, as a raft of data suggested Westminster’s Brexit crisis is beginning to strangle the UK economy.

Bank of England figures revealed a slowdown in consumer spending, with the annual growth of consumer credit standing at 5.5% in July, markedly lower than its peak of 10.9% in November 2016.

Shoppers borrowed £900 million in July, well below the £1.5 billion average from January 2016 to June 2018.

Alarm bells about the slowdown in consumer spending, which makes up the largest constituent of the economy, were augmented by data from research company GfK, which warned consumer confidence levels this month sank to the joint weakest level since 2013.

GfK’s monthly survey fell to minus 14 for August, another decline from minus 11 in July. “If there is a continuation of that dip in our feelings about our ‘future wallets’, we’d quickly see a headline score crash to a level that approaches the worrying figures seen in the worst days of the 2008/2009 financial crisis,” warned Joe Staton at GfK.

The data gave the pound another hit, down 0.25 cents to $1.2173 after plunging this week when traders were spooked by Government plans to suspend Parliament from mid-September.

The economy contracted for the first time since 2012 in the quarter from April to June, down 0.2%, stoking recession fears. Economists today sounded caution as the growing likelihood of a no-deal Brexit hits firms’ dealmaking.

New figures showed business confidence fell to its lowest since December 2011, when Britain was struggling to shake off the aftermath of the global financial crisis, according to the Lloyds Bank’s business barometer. Chirag Shah of Nucleus Commercial Finance, conceded: “As tensions heighten over Brexit, it’s hardly surprising to see confidence amongst businesses plummet so significantly.”

Fresh fears for the housing market were raised by property figures from Nationwide building society showing annual house price growth below 1% for the ninth month in a row in August, at 0.6%. Separate Bank of England figures, however, suggested mortgage market transaction levels remain stable.

“With the economy struggling and the outlook currently highly uncertain, we suspect that house prices will remain soft,” said Howard Archer, chief economist adviser to the EY Item Club.