Monday 22 January 2018

Brexit vote behind dip in consumer confidence

KBC Bank economist Austin Hughes. Photo: Gerard McCarthy
KBC Bank economist Austin Hughes. Photo: Gerard McCarthy
Charlie Weston

Charlie Weston

The uncertainty surrounding Brexit forced a dip in consumer confidence, but not by as much as feared.

Households are worried that Britain leaving the EU will impact on their finances, the KBC Bank/ESRI consumer sentiment index shows.

This prompted consumers to mark down their assessment of how the economy will do in the next few months.

The index fell, but not by as much as expected.

In July, the index fell to 99.6 from 103.4 in June.

KBC Bank economist Austin Hughes said the fall was due to fears over the impact of Brexit.

But the 3.8 percentage point drop was smaller than the monthly declines in March and May.

"It is not surprising that Irish consumer sentiment weakened in July in the wake of the UK referendum on EU membership, but the relatively limited drop in the sentiment index is probably a better outcome than might have been feared."

Mr Hughes said there were many uncertainties about the Brexit process. But consumers don't seem to regard it as posing a clear or immediate threat to their purchasing power.

"As a result, last month's headline figure suggests consumers have become a little more cautious, although they remain reasonably positive about the future."

He said people view Brexit as bad news for the Irish economy.

Irish Independent

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