Half the population fear losing their jobs during the next six months and two thirds would be prepared to take a pay cut or a reduction in hours to avoid being made redundant, according to an Asda survey.

The survey of 1,000 people also found that half expect their pay to be frozen or reduced this year.

The Asda report also revealed that if Chancellor Alistair Darling cuts taxes in his budget on April 22, most people would save the money or pay off debts. Just 5 per cent said they would actually spend any extra cash.

Asda chief executive Andy Bond told The Times: “Consumer confidence is the key to economic recovery, so it is essential that people are reassured that the fear of losing your job is much higher than the reality.

“Retailers also have an important part to play. By removing unnecessary cost and waste from their businesses, they can help to lock down inflation. By keeping prices as low as possible, we can also encourage people to keep spending their hard-earned money.”