London: With bosses warning of job losses and ministers pointing to the threat of terror, Britons are increasingly "living in fear" - and the climate is getting worse because of the recession, new research suggests.

In turn, the climate of fear is also having an impact on the economy, according to the Mental Health Foundation (MHF) study.

In one of the most wide-ranging studies of its kind, three quarters of people said they thought the world had become a more frightening place over the last decade.

As many as 49 percent of people said they were anxious about money, with 66 percent experiencing fear or anxiety about the current financial situation.

Issues that are making Britons more anxious include terrorism, knife-crime, hospital bed infections, bird flu, unemployment and constant monitoring by CCTCV cameras.

Government figures suggest that more than seven million people in Britain are suffering from anxiety disorders, an increase by 800,000 since 1993.

High levels of fear and anxiety are linked to depression as well as heart disease, and even conditions such as asthma and allergies.

Fear and anxiety is contributing to the economic crisis because emotion overrides logical thinking, the study said, adding: "Individuals and institutions - keen to protect themselves - are now too afraid to lend, spend and invest, despite the fact that these actions could assist in ending the recession."

Women were twice as likely to feel anxious and frightened as men, while young people were more likely than the older generation to be fearful.

The study said 24-hour news, information about threats and the "catastrophic" language often used by politicians, pressure groups, businesses and public bodies all contributed to anxiety.

MHF chief executive Andrew McCulloch urged the government and businesses to reduce "institutionally-driven" fear.

"This report shows that fear is having a serious negative impact on the mental and physical health of the nation," he said.