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Consumer mood softens amid rising prices and Covid cases

Households lower their outlook and are more downbeat about their financial situation

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Irish consumer confidence took a hit this month as inflation and uncertainty over public health restrictions put the brakes on a strong recovery trend, according to Bank of Ireland’s Economic Pulse.

The monthly reading of economic sentiment found households had lowered their outlook and were more downbeat about their own financial situation, with 85pc expecting price rises in the coming year.

“Consumers were more hesitant this month, with various worries, not least increases in the cost of living and the rise in virus cases, taking the shine off households’ mood,” said Bank of Ireland chief economist Loretta O’Sullivan.

“This month’s research finds that uncertainty is hampering activity in sectors like hospitality and arts and entertainment for example, while firms in industry are grappling with supply bottlenecks and higher input costs, with adverse implications for export competitiveness.”

Business sentiment was steady, however, bolstered by a strong upsurge in construction and a lift in retail. Three-quarters of respondents said now was a good time to sell property, up from just 25pc during lockdown.

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