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Irish consumers cautious but optimistic last month

Irish consumers were cautiously optimistic last month despite the economic turmoil in Europe and the US.

The KBC Ireland/ESRI Consumer Sentiment Index stood at 55.8 in August, slightly below 55.9 in July.

But the figure is still below a high of 67.9 achieved in June of last year.

"The August sentiment reading also hints that some consumers are finding a silver lining in dark economic clouds," said Austin Hughes, chief economist with KBC Bank.

"The reduced threat of further (European Central Bank) interest rate increases and a softening in oil prices seems to have helped sentiment," he said.

While the country is meeting the targets set out in the EU/IMF bailout, slower growth in Europe and the US could hit the export-led recovery.

Consumer confidence in the US, Germany and Britain fell to lows last month.

"Irish consumers hadn't upgraded their expectations anything like their US or euro zone counterparts in the past couple of years," according to KBC.

But one of the biggest issues is that Irish consumers are still not spending as we look to exports for growth.

The forward-looking index increased to 44.5 in August, from 43.6 in July.