Consumer confidence in the economy has taken a knock

The Westpac-McDermott Miller Index has fallen below its average.

Confidence varies between regions, with the most uncertainty in Wellington and a more positive outlook in the lower South Island.

Senior Economist Satish Ranchhod says ongoing cost of living pressures and global concerns - are taking their toll.

He says there have been some positives including a drop in interest rates, which shows the economy is gradually moving into a better position.