Research by Lloyds Bank found spending by British households grew by less than 1 per cent, with spending growth on gas and electricity bills falling from around 5 per cent in February to around 3 per cent in March. Spending on food and fuel also slowed.

The monthly survey of more than 2,000 consumers also found that sentiment towards the country’s financial situation continued to improve, helped by optimism over the housing market and employment prospects

The proportion of consumers who said Britain’s financial situation was ‘not good or not good at all’ was down from 90 per cent in March 2013 to 71 per cent in March 2014.

The balance of opinion on future discretionary income between those feeling they will have more versus less money in the next six months has a positive balance of 5 per cent. This is up from 2 per cent in February and minus 9 per cent this time last year.

Patrick Foley, chief economist at Lloyds Bank, said: “The economic backdrop for consumers continues to improve, as ongoing growth in employment, and pay growth that finally begins to keep pace with inflation, feeds through to rising confidence.

“As pressure on consumer wallets from essential spending continues to ease, both the willingness and capacity to undertake discretionary spending is likely to rise in the months ahead.”

Official figures released last week showed rises in weekly earnings have finally overtaken inflation.

Weekly wages, including bonuses, increased by 1.7 per cent in the year to February – beating inflation for the first time in six years.