03 Dec 2019
Irish consumer sentiment recovered last month from a seven-year low, recording its fastest monthly increase since 2015, as per the findings of a poll published on Tuesday.
Ireland has been and remains the fastest growing economy in the European Union during the three years of Brexit negotiations. However, consumer confidence was impacted last year when the likelihood of a no-deal Brexit increased.
The KBC Bank consumer sentiment index rose to 77.1 last month from 69.5 in October, bolstered by a fresh Brexit deal that Prime Minister Boris Johnson hopes to ratify following the December 12 election, according to a Reuters report.
This figure takes the index back to August’s level, but still far below the 96.5 mark from last year.
“Irish consumer sentiment improved notably in November as the reduced risks of a crash-out Brexit and the reality of a still healthy Irish economy provided some relief from recent gloom,” KBC Ireland’s chief economist Austin Hughes said.
He went on to say: “While official data published through the survey period point towards rising incomes and subdued inflation, we think the main driver of the change in November was a scaling back of Brexit worries.”
Hughes continued: “This outcome appears consistent with the idea that Irish consumers were viewing their world through slightly less dark-coloured Brexit glasses as the immediate threat of a ‘crash out’ Brexit disappeared and were replaced by expectations of an orderly transition period through the year ahead.”
The KBC Bank Ireland chief economist went on to add that the improvement was indicated the most in the survey’s forward-looking readings. However, although this revealed that concerns were easing, rather than “a sense that all is wonderful”, the reading may be a result of increased spending over the festive season.
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