Irish consumer sentiment improves as Brexit worries ease

Irish consumer sentiment recovered in November to end a run of three successive monthly falls as prospects for a Brexit deal improved and property and fuel inflation eased, a survey showed on Thursday.

Ireland’s economy is on course to be the best performer in the European Union for the fifth consecutive year, but concern about the vulnerability of the economy to an unruly British exit from the bloc has weighed on consumer sentiment.

The KBC Bank Ireland/ESRI Consumer Sentiment Index climbed to 96.5 in November from 93.5 in October. The index was at 96.4 in September and 102.4 in August.

“The rapid decline in confidence over the last three months has halted in November driven by major household purchases and anticipated improvements in future finances,” Philip Economides of the ESRI said.

“The approaching festive holiday season likely contributed towards the gain in confidence,” Economides said.

The survey’s authors said the improvement in the sentiment index does not signal a marked change in thinking on the part of consumers, but reflects a ‘pause’ following a sharp downgrading of prospects for personal finances as well as the economy in recent months.

“The improvement in sentiment in November is encouraging in that it suggests Irish consumers are very much aware of Brexit-related risks but they are not in panic mode,” KBC Ireland Chief Economist Austin Hughes said.

“While the survey suggests sentiment and spending may be cautious, it also emphasises that Christmas hasn’t been cancelled.”