Cuts to mortgage rate boosts the mood of consumers
Published 08/07/2014 | 02:30
HOUSE price rises and cuts in mortgage rates for some borrowers have boosted the mood of consumers.
But the rise in the consumer sentiment index was only slight, reminding the Government that it still has a lot of work to do to improve the lot of householders.
Last month the European Central Bank cut its key lending rate to an all-time low of just 0.15pc.
This gave another boost to close to 375,000 homeowners who have tracker mortgages.
That has now been reflected in consumer confidence improving last month, with the more upbeat mood also attributed to rising property prices.
Yet the rise in June came after a sharp fall the previous month.
The index of consumer confidence, put together by KBC Bank and the Economic and Social Research Institute (ESRI), rose to 81.1 in June, up from 79.4 in May.
The gradual pick-up in consumer confidence was due to the fact that householders feel the recovery is taking hold, but many people have yet to feel the benefits of better figures on job creation and house-price growth, economist with KBC Bank Austin Hughes said.
Mr Hughes said the rise in the index for June was positive, but he stressed that it was clear consumers were struggling to judge the economic conditions in the country.
He said householders were still traumatised by the collapse in the economy.
"Our sense is that for some time Irish consumer sentiment readings have reflected hugely increased uncertainty in the wake of the traumatic experiences of the past couple of years," he said.