Confidence in the economy evaporates is the lead in the Guardian this morning.

Gordon Brown's hopes of recovering from this month's hat-trick of electoral setbacks received a fresh blow today as falling house prices and rising food and energy bills prompted the biggest slump in consumer confidence since the onset of the last UK recession in autumn 1990.
A report by GfK NOP showed that the government's efforts to bounce back from Labour's third place in the local elections, defeat in the London mayoral election and the loss of the Crewe and Nantwich seat are being hampered by a mood of deep gloom that has engulfed voters in the year since Brown became prime minister

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Negative equity fears soar after record slump in house prices reports the Times

The cost of an average home fell by 2.5 per cent during May, the biggest monthly decline since records began in 1991, figures from the Nationwide Building Society show. House prices have fallen by nearly £12,500 since the market turned in October.
This month’s slide in prices prompted economists to forecast that house prices would fall by more than 20 per cent in two years. This would plunge two million homeowners, or one in six mortgage borrowers, into negative equity, according to Morgan Stanley, the investment bank.

Both the Times and the Telegraph lead with more specific economy stories

Fuel prices spark holiday crunch as air surcharges soar says the Times

Families are facing holiday misery this summer after big airlines sharply increased fuel surcharges on their flights, bringing the era of cheap air travel to an end.
Virgin Atlantic is imposing new charges today and, from Tuesday, British Airways long-haul passengers will have to pay £218 on top of the ticket price simply to cover the cost of fuel.

A family of four will have to pay £240 more for flights after British Airways announced the biggest rise in fuel surcharges in its history

says the Telegraph

The same paper carries the latest opinion polls which show that

Labour support has slumped to its lowest level since polling began.Gordon Brown's personal rating among voters is now the same as John Major's at his lowest point.
In the first poll since last week's Crewe and Nantwich by-election, the YouGov survey puts Labour on 23 points and the Conservatives on 47 - a Tory lead of 24 points.

Cut taxes to regain middle class support, Blairites tell Brown reports the Independent

The calls, from a group which includes five former ministers, go beyond the demands for a reduction in fuel duty, which has led tto conflicting signals from ministers. They amount to the opening salvos in a battle for the future direction of the Labour Party, ranged against left-wingers who are campaigning for socialism to be given greater priority.

If you want cheering up then turn to the front page of the Sun which says cedit crunch biting,fuel prices soaring and no footie but this will cheer you up

NAOMI Campbell BEAMED yesterday after being charged with air-rage offences which could get her six months in prison.
The supermodel, 38, faces six charges following her arrest when she was hauled off a jet at Heathrow.

adding

Naomi, in trouble before over her fiery temper, is accused of assaulting TWO police officers — one of them twice. She is also accused of two threats to air crew, and disorderly conduct.

Back to more serious matters and the Independent reports on its front page that

The last Briton in Guantanamo faces death penalty

In a letter delivered to Downing Street, Binyam Mohamed, the last Guantanamo inmate with the automatic right to British residency, calls on the Prime Minister to use his influence with President George Bush to stop an American military "kangaroo court" sending him to his death.
Mr Mohamed, 29, from Kensington, west London, who is expected to be charged by the Americans with terrorism-related offences in the next few days, claims he has suffered horrific abuse during more than six years in detention without trial.

Time to talk to al-Qaida, senior police chief urges reports the Guardian

Speaking to the Guardian, Sir Hugh Orde, head of the Police Service of Northern Ireland, said the experiences of his force tackling the IRA had convinced him that policing alone - detecting plots and arresting people - would not defeat al-Qaida inspired terrorism.
Orde, the frontrunner to be the next commissioner of the Metropolitan police, said he could not think of a single terrorism campaign in history that ended without negotiation.

Israel's killing of 18 Palestinians was 'a massacre' reports the Telegraph

Desmond Tutu, a leader of the struggle against apartheid in South Africa, has completed a mission to the Gaza Strip by describing Israel's killing of 18 Palestinians as a massacre.The Archbishop Emeritus of Cape Town, who has a long record of attacking Israel, said the deaths, in the town of Beit Hanoun in November 2006, had shocked members of his mission. His three-day trip to Gaza, which took place under the auspices of the United Nations, drew protests from Israel.

Staying with news from abroad and the Times reports that

Thousands of members of one of India’s lowest castes besieged the capital yesterday, blocking roads and railways to press their unorthodox demand — to be downgraded to an even lower social status.
The Gujjars, who are traditionally herders of cattle, goats and sheep, threatened to shut down Delhi as they broadened a protest movement that has left 39 people dead across northern India since it began last Friday.

Obama sets sights on finishing line reports the Guardian

Obama said he believed he would have accumulated enough delegates at that point to declare himself the Democratic nominee to face the Republican, John McCain, in the November election for the White House.
He told reporters the election campaign would begin after Tuesday. Asked if he would be the winner of the Democratic nomination, he said: "I believe so."

The Telegraph meanwhile reports

Senator Barack Obama emerged as Europe's favourite candidate for America’s presidency today when a poll conducted for Telegraph.co.uk gave him 52 per cent support across five of the world’s richest nations, including Britain

Knife crime has dominated the papers over the last few days and continues today

Police seize scores of knives in a search of 4,000 suspects reports the Times

More than four thousand people have been stopped and searched in London in the past two weeks as police try to address public concern over young people carrying knives.
The £1 million operation has led to the seizure of almost 200 weapons and to 210 arrests. Officers have used airport-style search arches and metal-detecting wands on the streets.

The Mail reports on the Boy 'stabbed to death over a dirty look'

A schoolboy was stabbed to death within an hour of giving a 'dirty look' to a gang loitering in the street, a court heard yesterday.
Martin Dinnegan, 14, died after he was repeatedly punched, kicked and finally knifed in the back in a street a few hundred yards from his home.
Yesterday, as two men and two youths stood trial for his murder, the prosecutor in the case condemned the growing culture of violence afflicting the young.

I sent my yob son to prison says the front page of the Mirror

A mother tells today how she sent her two vicious sons to jail - and urges other parents to do the same.
Carol Saldinack, 51, shopped booze-fuelled Luke Newman, 27, and Oliver Clark, 24, to police after learning that they battered a dad for no reason, blinding him in one eye.
Later, the thugs were jailed at Chichester, West Sussex, for two years for GBH.
Mum-of-six Carol tells the Mirror: "I felt nothing but guilt after I hung up the phone.

Meanwhile the front of the Mail reports that

Middle classes losing faith in 'rude' police who go for soft targets instead of the real criminals

They fear they have been alienated by a service which routinely targets ordinary people rather than serious criminals, simply to fill Government crime quotas.
The attitude of some officers has also led to spiralling complaints about neglect of duty and rudeness. The report from the Civitas think-tank says incidents which would once have been ignored are now treated as crimes - including a case of children chalking a pavement.

Harass a hoodie: how Essex police take surveillance to the streets reports the Guardian

Operation Leopard is the latest weapon in the fight against antisocial behaviour to receive government backing. Pioneered by officers in Essex policing difficult estates, it deploys forward intelligence teams (FITs) - units trained to gather evidence at foxhunts, protests and football matches - in areas suffering from crime.

It seems the problems are not just in Britain though as the Telegraph reports

A teenager who advertised her 16th birthday party on the internet saw her £4.5 million family home in Spain destroyed after more than 400 people turned up and caused thousands of pounds worth of damage.

According to the Times

Stonehenge may have been ‘the domain of the dead’ for royals

The original purpose of the stone monument in Wiltshire is one of archaeology’s most enduring enigmas. Previous theories have suggested that it was an astronomical observatory or a religious centre.
But radiocarbon analysis of human remains excavated from the site have revealed that it was used as a cemetery from its inception just after 3000BC until well after the largest circle of stones went up in about 2500BC. Previously, archaeologists had believed people were buried at Stonehenge only between 2700 and 2600BC.

The Mail reports

Tens of thousands of letters and parcels delayed as Royal Mail misses nine out of its 12 targets in the last year

The reliability of the Royal Mail collapsed last year, with the business failing to hit 75 per cent of its service targets.
Tens of thousands of letters and parcels were delayed or lost altogether against a background of cuts in services and strikes.

Dior drops Stone after quake comments says the Independent

Sharon Stone used to be a great ad for fewer wrinkles, but the 50-year-old's outburst linking the Sichuan earthquake to bad karma because of China's policy on Tibet means Christian Dior posters are coming down all over the Chinese capital.
The French fashion house has issued an apology for Stone's comments and pulled her from its Chinese ad campaign for anti-ageing products. And in good time, it appears, given that the Xinhua news agency has described Stone as "the public enemy of all mankind".

Finally many of the papers report on the Tribe that time forgot

HIDDEN deep in a dark tropical rainforest, a primitive tribe comes face-to-face with the modern world for the first time.
The terrified ancient clan raise their bows and arrows in self-defence as a noisy spotter plane disturbs their peaceful world.

says the Sun

The Telegraph adds

We did the over-flight to show their houses, to show they are there, to show they exist,' said Jose Carlos dos Reis Meirelles, an expert on "uncontacted" tribes, who works for the Brazilian government's Indian affairs department.
"This is very important because there are some who doubt their existence."